The opinion of the court was delivered by: James Orenstein, Magistrate Judge
REPORT AND RECOMMENDATION
Application of Burt Neuborne.
This Document Relates to: ALL CASES
Some seven years into his service as Lead Settlement Counsel in this litigation, attorney Burt Neuborne ("Neuborne") asked to be paid a fee of over four million dollars for that work, which he represented was a discount of millions of dollars from the figure he might otherwise claim. Attorneys Samuel J. Dubbin ("Dubbin") and Robert A. Swift ("Swift") -- the former representing a small number of the Holocaust survivors in the plaintiff class, the latter claiming to represent all of them -- objected. They argued, often in quite raw terms, that Neuborne should get nothing for years of work that have added many millions of dollars to the value of the settlement fund. Neuborne responded by withdrawing the offer to discount his fee.
As disheartening as such a dispute may be, it is made all the more so because its protagonists have otherwise done so much good in this litigation. Neuborne, Dubbin, and Swift, representing over a million victims of the Holocaust and their heirs, have worked hard to seek redress for their clients from the Swiss entities that added to their victimization by dispossessing them of their property and by assisting Nazi companies that profited from their misery.
The litigants agreed to cabin their dispute by having me recommend a disposition of five separate legal issues. I now report on my analysis of those issues and, as a result, respectfully recommend that the court award Neuborne a total of $3,095,325.
A. The Litigation And Settlement
In a series of class actions filed in 1996 and 1997, victims of Nazi persecution sought relief against a number of Swiss financial institutions for their role in collaborating with the Nazi regime and harming the plaintiffs in a variety of ways. The litigation has spawned many decisions in this court and the United States Court of Appeals for the Second Circuit, and I assume the reader's familiarity with the general background of the litigation that is recounted in some of them. Briefly stated, Plaintiffs alleged that, before and during World War II, they were subjected to persecution by the Nazi regime, including genocide, wholesale and systematic looting of personal and business property and slave labor. Plaintiffs alleged that, in knowingly retaining and concealing the assets of Holocaust victims, accepting and laundering illegally obtained Nazi loot and transacting in the profits of slave labor, Swiss institutions and entities, including the named defendants, collaborated with and aided the Nazi regime in furtherance of war crimes, crimes against humanity, crimes against peace, slave labor and genocide. Plaintiffs also alleged that defendants breached fiduciary and other duties; breached contracts; converted plaintiffs' property; enriched themselves unjustly; were negligent; violated customary international law, Swiss banking law and the Swiss commercial code of obligations; engaged in fraud and conspiracy; and concealed relevant facts from the named plaintiffs and the plaintiff class members in an effort to frustrate plaintiffs' ability to pursue their claims. Plaintiffs sought an accounting, disgorgement, compensatory and punitive damages, and declaratory and other appropriate relief.
In re Holocaust Victim Assets Litig., 105 F. Supp.2d 139, 141-42 (E.D.N.Y. 2000); see also In re Holocaust Victim Assets Litig., 424 F.3d 132, 135-44 (2d Cir. 2005).
In August 1998, the parties and others reached an agreement in principle to resolve the litigation. Key elements of the agreement included the defendants' creation of a $1.25 billion settlement fund, the defendants' waiver of certain legal and factual defenses, the stipulated revival of certain otherwise lapsed claims for members of the plaintiff class, and a broad range of releases for not only the named defendants but other Swiss business and governmental entities.
The beneficiaries of the settlement fund were not members of a single class, but rather five distinct groups of victims who suffered different forms of Nazi persecution (although I will often use the singular term "class" to refer to all of those groups). Specifically, on March 30, 1999, the court certified five classes of plaintiffs (for ease of reference, I have omitted from the description of each class important terms that define the precise scope of its membership):
1. Deposited Assets Class: ... victims or targets of Nazi persecution and their heirs ... who have ... claims against any releasee ... arising in any way from deposited assets or any effort to recover deposited assets.
2. Looted Assets Class: ... victims or targets of Nazi persecution and their heirs ... who have ... claims against any releasee ... arising in any way from looted assets or cloaked assets or any effort to recover looted assets or cloaked assets.
3. Slave Labor Class I: ... victims or targets of Nazi persecution and their heirs ... who ... performed slave labor for companies [that] deposited the revenues or proceeds of that labor with ... releasees ....
4. Slave Labor Class II: ... individuals and their heirs ... who ... performed slave labor at any facility or work site, wherever located, ... owned, controlled or operated by any corporation or other business concern headquartered, organized or based in Switzerland ....
5. Refugee Class: ... victims or targets of Nazi persecution and their heirs ... who sought entry into Switzerland ... to avoid Nazi persecution and who ... either were denied entry into Switzerland or, after gaining entry, were deported, detained, abused or otherwise mistreated ....
105 F. Supp.2d at 143-44.
As part of the agreement, the parties deliberately postponed creating a plan to distribute the settlement fund among the plaintiff class members. Id. at 142. "Instead, the settlement [set] forth a fair and open mechanism for the development of criteria pursuant to which distribution and allocation determinations [would later] be made." Id. Class members could commit to the settlement at the outset, not knowing what their respective shares of the fund might be, or they could withdraw and pursue their own individual claims. Moreover, "to spare Holocaust survivors from being forced into an adversarial relationship that would have required them to squabble over a settlement fund that, while substantial, is necessarily insufficient to do full justice to all members of each plaintiff class," Submission of Lead Settlement Counsel in Support of the Special Master's Proposed Plan of Allocation and Distribution of Settlement Proceeds, dated November 20, 2000 at 3, reprinted in Docket Entry ("DE")*fn1 76, Ex. 3, the plan called for the appointment of a neutral Special Master to make allocation decisions on behalf of all, with certain procedural protections, in lieu of an adversarial process in which each interested class and subgroup would have separate representation. In re Holocaust Victim Assets Litig., 105 F. Supp.2d at 149-51.*fn2 As will become clear, the uncertainty as to distribution that the parties embraced, although of crucial importance in fostering the settlement, has also been the origin of significant controversy.
Before approving the settlement on July 26, 2000, the court approved an extensive notice plan "tailored to the unique circumstances of this case" to advise class members of the proposed settlement and solicit their views about it. Id. at 144. It then conducted fairness hearings in both the United States and Israel in late 1999. See Order dated November 29, 1999, Lead DE 419; Calendar Entry dated November 29, 1999, Lead DE 436. After taking those steps to solicit the views of the class and reviewing the responses (which included the submission of over half a million initial questionnaires completed by class members), the court concluded that "the response of the classes has been overwhelmingly positive, as the vast majority of class members responding to the notice are interested in participating in the settlement, and only a tiny fraction of class members has expressed dissatisfaction with its terms." In re Holocaust Victim Assets Litig., 105 F. Supp.2d at 147.
B. The Allocation Of The Settlement Fund
As noted above, a key feature of the settlement proposal was its postponement of any decision about how the $1.25 billion dollar recovery it produced for the class would be distributed among its members. A court-appointed Special Master submitted his proposed plan for accomplishing the distribution on September 11, 2000, and the court adopted it some two months later. See In re Holocaust Victim Assets Litig., 2000 WL 33241660 (E.D.N.Y. Nov. 22, 2000), aff'd, 413 F.3d 183 (2d Cir. 2001). For the most part, the details of the distribution plan are not germane to the instant dispute, but one aspect of it has produced tremendous rancor that reverberates to this day. Specifically, the Special Master recommended initially that $100 million be allocated to [the] Looted Assets Class and that the money be distributed to its neediest members.... I adopted [that recommendation] on November 22, 2000.... On September 25, 2002, I adopted another recommendation of the Special Master that an additional $45 million in "excess" funds be allocated to that class. Finally, on November 17, 2003, I adopted the recommendation of the Special Master that $60 million in "excess" funds be allocated to the Looted Assets Class and be distributed in accordance with the cy pres principles that have successfully governed the administration of the initial allocation and distribution of $100 million to the Looted Assets Class in 2001, and the first supplemental allocation and distribution of $45 million in 2002.
In re Holocaust Victim Assets Litig., 302 F. Supp.2d 89, 91 (E.D.N.Y. 2004). The allocation of the funds to the neediest members of the Looted Assets Class according to the principle of cy pres was not, in itself, a cause of much controversy. Rather, it was the application of the principle -- and, more precisely, the refusal by some class members to accept it -- that has caused years of strife among and between certain of the class members and their lawyers. Specifically, after allocating 90 percent of the Looted Asset Class's recovery to Jewish victims and their heirs, the court determined that only four percent of that group's share would be allocated to such persons in the United States, with the bulk of the distribution going to those in the former Soviet Union. See id. at 97-107 (explaining the allocation decision). That decision and others conforming to it have sparked years of repetitive challenges, primarily by Dubbin on behalf of many of the same individual objectors to the instant application. See In re Holocaust Victim Assets Litig., 424 F.3d 132, 141-45 (2d Cir. 2005) (describing challenges and affirming district court's allocation decisions). Of particular relevance to the instant dispute is the fact that Neuborne, having previously advocated for the allocation of a larger share to needy survivors in the United States, defended the district court's decisions on appeal.
Neuborne has served in two distinct roles in this litigation, only one of which is implicated in the pending fee application. Briefly stated, Neuborne has served as both counsel to the entire plaintiff class and as Lead Settlement Counsel. In the latter capacity, Neuborne has helped to administer the settlement, provided advice to those attempting to navigate the allocation process, offered advice to the court on a variety of matters affecting the post-settlement litigation, and -- most controversially -- has submitted adversarial defenses of certain district court rulings in opposition to the appeals of certain class members who were unsatisfied with the court's allocation decisions.
Early in the litigation, the court appointed an executive committee, including Neuborne, to represent the interests of the then-putative class of plaintiffs in prosecuting their claims. Pretrial Order No. 1 dated April 18, 1997, Lead DE 26. Some two years later, the court formally appointed Neuborne to serve as that committee's Lead Counsel. Order dated April 20, 1999, Lead DE 264. In his role as plaintiffs' counsel, Neuborne helped hone the plaintiffs' legal theories, advanced their cause in the litigation, and was instrumental in helping to forge what became the parties' settlement agreement. Neuborne explicitly and repeatedly waived all compensation for that work, and the court placed great emphasis on that fact in endorsing the settlement he helped achieve as procedurally fair. In re Holocaust Victim Assets Litig., 105 F. Supp.2d at 145-46. He does not now seek to renege on that commitment in making the instant application to be compensated for the work he has done in his other role in this litigation.
Neuborne's second role -- as Lead Settlement Counsel -- has been both more extensive in duration and more amorphous, as discussed at length in the substantive discussion that follows.
Briefly stated, as Neuborne described the role in a declaration submitted in late 1999 in support of the then-pending settlement proposal, in addition to his role as plaintiffs' counsel,
I also serve, pursuant to the Court's order, as Lead Settlement Counsel in connection with the implementation of the settlement agreement. In that capacity, I have worked closely with counsel for the plaintiffs ... in formulating and implementing the notice program, and with the Special Master ... in preparing a plan of allocation and distribution.
November 5, 1999 Declaration of Burt Neuborne ("Neuborne 1999 Dec.") ¶ 1, reprinted in DE 76 Ex. 1. As time wore on, Neuborne's role as Lead Settlement Counsel took on a variety of other functions, some of which the Objectors now assert are not properly compensable (assuming that Neuborne is not estopped from seeking any compensation at all).
D. The Instant Fee Application
Neuborne first made a public application for payment on December 23, 2005. See December 23, 2005 Declaration of Burt Neuborne ("Neuborne 2005 Fee Dec."), Lead DE 2881.*fn3
At that time, Neuborne did not name any specific amount of compensation that he requested, but simply asked the court to award him "appropriate fees." Id. at 54-55. In his next submission, filed on January 3, 2006, Neuborne specified the full amount he would accept as compensation for his service as Lead Settlement Counsel: $4,088,500. Memo. of Law in Support of Lead Settlement Counsel's App. for Counsel Fees, filed January 3, 2006 ("Neuborne Jan. 2006 Fee Memo."), Lead DE 2884. Two months later, Neuborne reiterated his request for the same fee but cautioned that he viewed the amount as less than he might reasonably request, and reserved the right to seek far more if the court balked at approving the amount he specified. See Memorandum of Law in Support of Lead Settlement Counsel's Application for an Award of Counsel Fees for Post-Settlement Services Provided to the Settlement-Classes, dated March 17, 2006 ("Neuborne March 2006 Memo.") at 35, DE 38. Neuborne offered extensive documentation in support of his claim, including detailed time records.
Neuborne's request generated vigorous opposition from Dubbin -- who represented objectors disappointed by the court's allocation decisions, and whose own fee requests had been denied, in part on the basis of opposition from Neuborne -- as well as from Swift, who purported to voice the opposition of the entire class. There ensued an extensive and unruly flood of letters, emails, memoranda, and declarations about many aspects of the application and the objections thereto. Among the objections were a variety of criticisms of the time records that Neuborne had submitted to document some seven years of work. Those objections, if not resolved on consent, promised to bog the parties down in extensive and laborious litigation.
In an effort to narrow the parties' disputes, Chief Judge Korman held a telephone conference with Neuborne's counsel, Dubbin, and Swift on March 2, 2006, see Conf. Tr., and thereafter formally referred them to me for further discussion. Order dated March 13, 2006, DE 33.
I had a lengthy meeting with the parties on May 18, 2006, at which all concerned sought to cabin their dispute in a way that would obviate the need for protracted hearings about the sufficiency and accuracy of Neuborne's record-keeping. By the end of that meeting, the parties had reached an agreement to do just that. Specifically, the parties agreed that Neuborne would withdraw his request to be compensated for 1,500 of the 8,378.5 hours of work he had previously claimed, and that a determination of the following five issues would resolve the pending objections to the remaining claim for compensation:
a. Judicial estoppel: whether Neuborne should be denied any compensation pursuant to the doctrine of judicial estoppel. Resolution of this issue in Neuborne's favor would still require a determination of the remaining four issues, but resolving it in the Objectors' favor would moot those questions.
b. The lodestar hourly rate: whether the hourly rate of $700 that Neuborne demands for his work as Lead Settlement Counsel (but not for his work as counsel to the class in achieving the settlement, for which he has sought no compensation) is excessive.
c. Lodestar hours -- non-remunerative work: whether Neuborne should be compensated for work that did not result in a net increase to the size of the settlement fund. The parties agreed that a resolution of this issue in the Objectors' favor would result in the exclusion of all but 600 of the hours for which Neuborne seeks compensation.
d. Lodestar hours -- "general counsel" work: whether Neuborne should be compensated for work generally characterized as arising from his role as "general counsel" to the court in connection with defense and administration of the settlement. The parties agreed that a resolution of this issue in the Objectors' favor would result in the exclusion of 800 of the hours for which Neuborne seeks compensation. It is also apparent that this issue is moot if the preceding one is resolved in the Objectors' favor.
e. Lodestar adjustments: whether the lodestar amount of Neuborne's fee award, if any, should be increased by application of an "excellence multiplier."
See Order dated May 18, 2006, DE 66.*fn4
Having thus framed the dispute, on July 21, 2006, the parties submitted supplemental letter briefs that set forth their views (or directed me to earlier presentations of them) on each of these specific issues. See Final Memo. of Law in Support of App. of Burt Neuborne for Counsel Fees in Connection with Post-Settlement Services Rendered as Lead Settlement Counsel, dated July 21, 2006 ("Neuborne Final Memo."), DE 72; Swift Response to Neuborne Final Memo., dated July 21, 2006 ("Swift Final Memo."), DE 73; Dubbin Response to Neuborne Final Memo., dated July 21, 2006 ("Dubbin Final Memo."), DE 75. After addressing some remaining preliminary matters, I address each of these five issues in turn below.
1. Notification To The Settlement Class
The participants in the instant dispute disagree as to whether the members of the plaintiff class have sufficient notice of Neuborne's fee application and the ensuing proceedings. At the conference on May 18, 2006, they all agreed that it would be appropriate to resolve the merits of the pending objections to the fee application before resolving the related issue of notice. Swift, however, now advocates a different course, and suggests not only that the issue can be decided now, but that I should be the one to decide it. Swift Final Memo. at 1 n.1 ("Unless your Honor believes that this issue has been decided by Chief Judge Korman, it is ripe for decision by your Honor at this time."). Dubbin's submission is more equivocal: the single paragraph addressing the issue states that the Objectors "rely on their argument in their March 17, 2006 Opposition Memo regarding notice to the class." Dubbin Final Memo. at 1. The paragraph goes on to advocate notice pursuant to Rule 23(h)(1) of the Federal Rules of Civil Procedure. Read in context, it appears that Dubbin has identified all of the arguments he believes apposite to the issue of notice. Neuborne, in contrast, merely notes the participants' prior agreement to defer the issue without stating whether there are further arguments he would submit on the matter. Neuborne Final Memo. at 5 n.7.
Like Swift and Dubbin, I believe the existing record suffices to resolve the issue of notice. In the absence of an agreement that I should resolve the issue on its merits by decision, I merely offer a recommendation, rather than ordering an outcome as Swift proposes. In making that recommendation, I concur with Neuborne. I conclude that the plaintiff class has received sufficient and reasonable notice of the fee application, and that nothing more is required under Rule 23(h)(1).*fn5
The notification rule the Objectors invoke provides that "[n]notice of the motion [for an award of attorney fees] must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner." Fed. R. Civ. P. 23(h)(1). There are at least two independent reasons why that rule appears to be no obstacle to awarding Neuborne a fee on the current record.
First, Neuborne's application does not fall within the category of "motions by class counsel" that must be "directed to class members in a reasonable manner." If Neuborne were to break his pledge to disavow compensation for his work in securing the settlement, his application for compensation in that role would unquestionably be a motion "by class counsel" that would have to be directed to class members in a reasonable manner. But in seeking compensation for his role as Lead Settlement Counsel, Neuborne's motion is no more governed by Rule 23(h)(1) than are the periodic applications for fees submitted by Michelle Weitz, Neuborne's assistant, who has regularly applied for and received compensation for her legal work in the post-settlement phase of this case without objections. See, e.g., Order dated March 3, 2003, Lead DE 1567 (awarding compensation "for legal assistance [attorney Weitz] provided Professor Neuborne in carrying out his responsibilities as Lead Settlement Counsel").
To be sure, the Advisory Committee on Civil Rules has explicitly noted its intention that the notice provision of Rule 23(h) apply to some attorneys who do not fall within the strict confines of the term "class counsel."
[Rule 23(h)] provides a format for all awards of attorney fees and nontaxable costs in connection with a class action, not only the award to class counsel. In some situations, there may be a basis for making an award to other counsel whose work produced a beneficial result for the class, such as attorneys who acted for the class before certification but were not appointed class counsel, or attorneys who represented objectors to a proposed settlement under Rule 23(e) or to the fee motion of class counsel. Other situations in which fee awards are authorized by law or by agreement of the parties may exist.
Fed. R. Civ. P. 23(h) Adv. Comm. Note (2003 amendment). However, the Committee's note illustrates that intention exclusively with examples of attorneys who, like "class counsel," perform work on behalf of a class that serves to secure relief for the class, rather than to administer a settlement (or damages) fund after disposition of the class's substantive claims. Although the point is certainly arguable, I believe that neither the language of the rule nor the advisory committee note compels a finding that Rule 23(h)(1) was designed to govern the circumstances of an application like the one by Neuborne now before the court or the earlier applications to compensate Ms. Weitz that have all been resolved without any formal class notification program.
Second, even if Rule 23(h)(1) applies in these circumstances, its mandate has been satisfied. Neuborne's fee application has been published on the Internet web site devoted to this case, as have all of the related submissions that discuss the many objections to that request. See Holocaust Victim Assets Litigation (Swiss Banks) Home Page, http://www.swissbankclaims.com (last visited Mar. 15, 2007). In addition, the instant dispute has been reported and discussed in numerous news and opinion articles published around the world by major news outlets.*fn6 Despite the fact that a number of the articles have mentioned that the case has been referred to me for a Report and Recommendation, I have received no additional submissions of any kind from any other class members aside from those represented by Swift and Dubbin. In short, the extensive publicity surrounding this fee litigation assures that Rule 23(h)'s requirement of reasonably wide-spread notice is met.
Indeed, as a practical matter, it is hard to imagine a notice program that would, without costing as much as the amount of fees at stake here, be effective enough both to ensure wider notice than has already been effected as a practical matter and to generate substantive views that are not already being vigorously litigated. For any such notification regime to be considered reasonable, there would have to be some basis to believe that depriving the settlement class of the additional funds would be reasonably likely to vindicate some interest not already being represented. In light of the extensive publicity surrounding this dispute, the broad array of substantive objections already raised, and the vigor with which the objectors already before the court have pressed their arguments, it is difficult to imagine that any further notification program would accomplish anything other than a pointless dissipation of significant funds that would otherwise be allocated on a cy pres basis to needy class members. Under such circumstances, I believe that the court can best fulfill its obligations under the law, and its obligations as a fiduciary to the Settlement Class by rejecting the calls for further notification measures.
On a related matter, I conclude that the court can award fees to Neuborne without conducting a hearing, notwithstanding Dubbin's assertion -- made prior to the parties' agreement on May 18, 2006, to narrow the issues as described above -- that a local procedural rule leaves the court with "no discretion about the necessity of a hearing...." Objections of Class Members to Request by Lead Settlement Counsel for Attorneys Fees and Request for Hearing, dated March 17, 2006 ("Dubbin Initial Memo.") at 9, DE 44. The cited rule requires a hearing before an award of fees "for attorneys or others ... upon recovery or compromise in a derivative or class action on behalf of a corporation or class...." Loc. Civ. R. 23.1. However, Neuborne's fee application is not predicated on his role in securing a "recovery or compromise in a derivative or class action on behalf of a corporation or class[,]" but rather on his work as Lead Settlement Counsel after a compromise had already secured a recovery for the class. Moreover, the extensive litigation over the instant application ensures that the lack of a hearing will not prejudice the legitimate interests of class members in having the court give due consideration to every objection to Neuborne's fee request.
2. Attorney Swift's Standing To Litigate Objections
The objections to Neuborne's fee applications come from two sources. First, Dubbin has lodged a variety of objections on behalf of 17 individual members of the Looted Assets Class whose names or initials are listed in the margin (the "Individual Objectors"),*fn7 as well as on behalf of the Holocaust Survivors Foundation USA, Inc. ("HSF").*fn8 Second, Swift has raised a number of objections similar to those raised by Dubbin, although the identity of the client making those objections is to some extent in controversy. Unlike Dubbin, Swift -- who is not himself a member of the Settlement Class -- does not purport to act on behalf of any individual class member. Instead, he claims to lodge his objections on behalf of the entire Settlement Class as such.
The proposition that Swift has objected on behalf of the Settlement Class itself is somewhat surprising for two reasons. First, Swift is not alone in representing the Settlement Class; he is in fact Neuborne's colleague in that capacity. But see Letter from Burt Neuborne to Chief Judge Korman, dated May 15, 2006, Lead DE 3090 (pending application by Neuborne to remove Swift from representation of the class). Swift's views about the merits of Neuborne's application are therefore no more definitively attributable to the class as a whole than are Neuborne's.
Second, Swift himself has complained -- purportedly on behalf of the Settlement Class, to be sure -- that the class has not yet received adequate notice of the pending fee application. The proposition presents something of a paradox. If Swift is in a position to speak on behalf of the Settlement Class with sufficient authority to raise its objections to Neuborne's application, then the fact that he has done so suggests that the class has quite obviously received all the notice it needs to protect its cognizable legal interests. On the other hand, if Swift is correct that the class has not been notified, it logically follows that neither Swift nor anyone else can possibly be in a position to know whether the class objects or consents to a fee application, much less identify the specific objections that the class may have. Moreover, the rule governing fee applications in class actions provides for objections by "[a] class member, or a party from whom payment is sought[.]" Fed. R. Civ. P. 23(h)(2). By its plain language, the rule makes no provision for the class itself to object to its attorney's application. Viewed against the textual background of the applicable rule, Swift's submission is thus as much of a procedural anomaly as it is a logical one.*fn9
Nevertheless, I recommend that the court abstain from resolving the thorny question of whether Swift's objections are made on behalf of any party that enjoys standing in this litigation. The objections he raises are largely duplicative of those lodged by the Individual Objectors, and Neuborne has agreed in any event that those objections should not be overruled for want of standing. See Order dated May 18, 2006 at 2. As a result, in the analysis that follows, I use the term "Objectors" to refer collectively to Dubbin's clients as well as to whomever it is that Swift represents in making his submissions in opposition to Neuborne's fee application. Similarly, despite its imprecision -- given the dispute as to whether the class as a whole, or other members of it, have had a sufficient opportunity to participate in the litigation of this dispute -- I will use the term "parties" to refer collectively (and exclusively) to the Objectors and Neuborne.
3. Potential Grounds For Recusal
No party has sought my recusal and I do not believe there is any reason to recuse myself sua sponte. Nevertheless, in the interest of transparency, I briefly mention two facts, one of which I discussed explicitly with counsel at my first meeting with them, and the second of which is a matter for public record. First, as I disclosed to counsel at our conference, my late father, as well as his parents and siblings, were victims of Nazi persecution. To my knowledge, however, neither I nor any member of my family qualifies for membership in any certified class in this case. Second, it is a matter of public record -- available on the page containing my biographical information on the court's Internet web site, http://www.nyed.uscourts.gov, among other places -- that I am an alumnus and a member of the adjunct faculty of the New York University School of Law ("NYU"), where both Neuborne and his counsel are tenured professors. However, as far as I am aware, outside of the adversarial proceedings in this case, I have never met or spoken with either Neuborne or his counsel other than a during a brief introduction to both men at a legal discussion panel event some time in 2005, prior to my assignment to this case.*fn10 Accordingly, absent any reason to recuse myself, I proceed to analyze the five subsidiary issues pertinent to the pending fee application.
Dubbin argues that because Neuborne has made a variety of statements during the pendency of this litigation -- before and after the settlement was approved, and to the court as well as to others -- to the effect that he has worked for free, he is barred from seeking any award of fees by the doctrine of judicial estoppel. See Dubbin Final Memo. at 1-2. As explained below, I disagree.*fn11
I note as a preliminary matter that there arguably is no live dispute as to whether Neuborne is judicially estopped. Before recusing himself from this aspect of the litigation, Chief Judge Korman held a telephone conference with the parties at which he stated that Neuborne had "rendered extraordinary service" and that he is "entitled to be paid a reasonable fee." Conf. Tr. 11. Later in the same conference, Chief Judge Korman said, "I don't believe that he was estopped." Id. at 34. I do not take either of these statements to constitute a legal ruling on Dubbin's estoppel argument, nor does it appear that Chief Judge Korman intended any such a result. Id. at 21. However, I do view another statement that Chief Judge Korman made at the outset of the conference to be an important part of the factual record: "I agreed with [Neuborne] that he would be entitled to legal fees." Id. at 5. Chief Judge Korman's acknowledgment in this regard corroborates Neuborne's uncontroverted assertion that, early in his tenure as Lead Settlement Counsel, he notified the court of his desire for compensation and that he agreed to serve in that capacity based on the court's commitment that he would receive a reasonable fee. Neuborne Omnibus Fee Dec. at 93-95.
1. The Applicable Legal Standard
Judicial estoppel is an equitable doctrine that courts can invoke to preclude parties from asserting inconsistent positions in successive litigation. New Hampshire v. Maine, 532 U.S. 742, 750 (2001); see also 18B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4477 (2d ed. 2002) ("Wright & Miller"). As the Supreme Court has described it, the doctrine is essentially one of fair play that protects judicial integrity:
[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him.
Davis v. Wakelee, 156 U.S. 680, 689 (1895); see also OSRecovery, Inc. v. One Groupe Int'l, Inc., 462 F.3d 87, 93 n.3 (2d Cir. 2006) ("judicial estoppel ... is designed to protect the integrity of the judicial process").
While the basic principle is easily stated, there is no bright-line rule of application to give it effect -- a difficulty that has prompted some courts to disavow the doctrine entirely. See, e.g., McGuire v. Continental Airlines, 210 F.3d 1141, 1145 n.7 (10th Cir. 2000) ("it is well established that judicial estoppel does not exist in the Tenth Circuit"); see also Wright & Miller § 4477 nn.2, 16. In this circuit, however, the doctrine remains good law. See, e.g., Peralta v. Vasquez, 467 F.3d 98, 105 (2d Cir. 2006) (describing the doctrine of judicial estoppel as a rule that allows enforcement in later proceedings of a litigant's earlier commitment).
Although different courts have articulated different formulations of the elements of judicial estoppel, the test in this circuit has two basic elements: "In order for judicial estoppel to be invoked, (1) the party against whom it is asserted must have advanced an inconsistent position in a prior proceeding, and (2) the inconsistent position must have been adopted by the court in some matter." Peralta, 467 F.3d at 105. Each element is exacting. The first element requires not only that the position of the party to be estopped is inconsistent with an earlier position, but that it be clearly so. See, e.g., Simon v. Safelite Glass Corp., 128 F.3d 68, 72-73 (2d Cir. 1997) (absent "a true inconsistency between the statements in the two proceedings .... there is no occasion to apply an estoppel").*fn12 The second element protects judicial integrity by requiring something more than just a court's acknowledgment of the prior inconsistent position; namely, an adoption that makes the position part of the court's own action. See OSRecovery, 462 F.3d at 93 n.3; Uzdavines v. Weeks Marine, Inc., 418 F.3d 138, 148 (2d Cir. 2005) (noting that judicial estoppel is limited to "'situations where a party ... has had [its] earlier [inconsistent] position adopted by the tribunal to which it was advanced'" and where "'the risk of inconsistent results with its impact on judicial integrity is certain'") (quoting Stichting v. Schreiber, 407 F.3d 34, 45 (2d Cir. 2005); and Simon v. Safelite Glass Corp., 128 F.3d at 72). As explained below, I conclude that Dubbin can demonstrate neither of these two elements: there is neither a clear inconsistency between Neuborne's earlier statements and his current fee application nor any judicial adoption of the position that Neuborne was working for free as Lead Settlement Counsel.*fn13
2. Neuborne Has Not Advanced Clearly Inconsistent Positions
a. The Statements At Issue
To provide context for my analysis, I summarize here the statements upon which Dubbin relies in seeking to estop Neuborne's fee application, with statements by Neuborne himself presented first in chronological order, followed by the statements of others about Neuborne upon which Dubbin also purports to rely. The task is made somewhat more cumbersome than it might otherwise be as a result of Dubbin's practice, in several instances, of citing an entire document without providing the particular statements within it on which he purports to rely. In trying to identify those statements, I am guided by the general description that Dubbin has provided in articulating the substance of his estoppel argument:
Mr. Neuborne has repeatedly represented that he is serving as "Lead Plaintiffs' Settlement Counsel" on a "pro bono" basis, or "without fee," or having "waived fees." Those representations were made in this Court, in the Second Circuit Court of Appeals, in the U.S. District Court for the Southern District of Florida, and in numerous publications.
Dubbin Initial Memo. at 10 (footnote listing citations to statements omitted).
i. Statements By Neuborne
November 5, 1999. The earliest statement upon which Dubbin relies is a declaration made by Neuborne in November 1999 as part of his effort to persuade Chief Judge Korman to grant preliminary approval to the settlement of this litigation. See generally Neuborne 1999 Dec. Of particular relevance are the following passages:
1. ... I am a founding member of the plaintiffs' Executive Committee. I serve, at the Court's suggestion and with the consent of all counsel, as co-counsel for all plaintiffs herein. In that capacity, I participated fully in the preparation and argument of plaintiffs' legal position, and in the extensive negotiations that culminated in the settlement agreement currently before the Court. I also serve, pursuant to the Court's order, as Lead Settlement Counsel in connection with the implementation of the settlement agreement. In that capacity, I have worked closely with counsel for the plaintiffs ... in formulating and implementing the notice program, and with the Special Master ... in preparing a plan of allocation and distribution. I have communicated personally with hundreds of class members, and have spoken to large gatherings of class-members.... I have explained the settlement agreement and notice provisions to numerous interested persons seeking to assist class-members.... I am serving without fee.
28. ... [T]he structure and mechanics of the settlement agreement assures absent class members the undivided loyalty of dedicated and competent counsel, and a Court-appointed Special Master devoted to achieving the fairest possible result for members of the plaintiff classes, while avoiding unseemly and psychologically destructive formal divisions between and among victims of the Holocaust at the close of their lives. The principal structural impediment to undivided loyalty in certain recent class actions has been the potential conflict between and among entrepreneurial class counsel, who may have a financial interest in fees generated by an expeditious settlement; the defense bar intent on assuring a global settlement; and the interests of absent class members in continued litigation. Similarly, concerns have been expressed that the financial interests of entrepreneurial class counsel may cause counsel to favor certain class members at the expense of others in setting the terms of any settlement. Such a "divided loyalty" structural concern is completely absent from this case. Key members of the plaintiffs' Executive Committee who negotiated this settlement agreement are providing their services on a pro bono basis, at most requesting that in lieu of attorneys fee payments be made to law schools to endow Holocaust Remembrance Chairs .... Numerous lawyers, including Lead Settlement Counsel, have waived all attorneys fees. Those relatively few members of the plaintiffs' Executive Committee who are seeking fees personally have agreed to limit their fee applications to the traditional "civil rights" standard of lodestar for time actually expended that materially advances the litigation, and all fees are capped at no more than 1.8% of the settlement fund, with discretion to award a lower sum. No possibility exists, therefore, of a significant financial conflict of interest between counsel and any class member.
33. Even more important than the practical impediments to using separate counsel to represent each subclass and generation, were the adverse social and psychological consequences of such a formal division of Holocaust victims into rival interest groups squabbling over a settlement fund that all agree is inadequate to provide full compensation to the victims. The members of the plaintiff classes are elderly victims of an unparalleled human catastrophe. At the close of their lives, it would be socially and psychologically irresponsible to pit one group of Holocaust victims against another in an unseemly battle for a larger share of a limited settlement fund that cannot do real justice to all. Instead, freed from any structural conflict of interest caused by financial self-interest, each plaintiffs' counsel pledged to assist the Special Master by making available all relevant factual material, and by providing any necessary legal assistance in an effort to be fair to all class members. If the Court approves the settlement agreement, the process of allocation will then go forward in a scrupulously fair, but non-adversarial manner that respects the rights and dignity of class members.
34. While such an effort to temper the formal adversary process by imposing overlapping, non-adversary responsibilities on counsel may not be appropriate in other settings, under the unique circumstances of this litigation, the fourfold safeguards of ... dedicated pro bono lawyers pledged to assist in the development of the fairest plan of allocation [and three other safeguards] satisfies Rule 23, the commands of due process, and the ethical demands of this unique effort to invoke the class action mechanism on behalf of elderly Holocaust victims who lack the resources to assert legal claims of their own.
Id. ¶¶ 1, 28, 33-34 (footnotes omitted; italics supplied by Dubbin in DE 16 at 10-12).
June 26, 2000. Dubbin next cites a declaration that Neuborne submitted in further support of the proposed settlement. See Dubbin Final Memo. at 4 (citing Supplemental Declaration Of Burt Neuborne In Support Of An Application For An Order Pursuant To Rule 23(e) Approving The Settlement Agreement As Fair, Adequate And Reasonable, dated June 26, 2000, ¶ 12, reprinted in DE 76 at 19); Dubbin Initial Memo. at 10-11 n.8 (citing same). If there is any statement in that document relevant to the estoppel argument, however, I cannot find it. The single paragraph to which Dubbin draws my attention says absolutely nothing about Neuborne's fees or an intention to waive them. To the extent Dubbin cites that paragraph because it refers to the declaration of November 5, 1999, it adds nothing to the analysis of the estoppel issue.
November 20, 2000. The next statement that Dubbin cites is likewise silent on the matter of Neuborne's fee. See Dubbin Final Memo. at 4 (citing Submission of Lead Settlement Counsel In Support Of The Special Master's Proposed Plan Of Allocation And Distribution Of Settlement Proceeds at 3 & n.1, reprinted in DE 76 Ex. 3). Like the previously discussed statement, this one describes the settlement's approach to fostering a non-adversarial relationship among the various subsets of the settlement class, but says nothing at all about whether or how Neuborne will be compensated.
June 15, 2001. The next statement (in chronological order) that Dubbin cites comes from a footnote in an appellate brief that Neuborne co-authored. See Dubbin Initial Memo. at 10-11 n.8 (citing Brief of Plaintiff-Appellees in Response to Appellants Julia Becker Lenini, et al. and the Estate of Nathan Katz at 22 n.51, Lenini v. Friedman,No. 00-9217(L) (2d Cir. June 15, 2001) reprinted in DE 85 at 62, available at 2001 WL 34117787)). The brief sought to defend on appeal the district court's approval of the settlement distribution plan against a challenge by appellants claiming to speak on behalf of Romani Holocaust victims. For purposes of context, I reprint below not only the footnote that Dubbin cites, but also the pertinent text to which the footnote pertains.
Although the District Court found that the presence of key settlement counsel serving without fee and the appointment of a neutral Special Master made it unnecessary to appoint separate counsel for each plaintiff class,*fn14 the District Court appointed a separate settlement counsel for the Romani to assure that the interests of the Romani were adequately represented.
February 22, 2002. After the settlement had been approved, Neuborne submitted several declarations providing his views on the extent to which the various attorneys who had represented the plaintiffs in connection with the settlement should be compensated. Dubbin focuses his attention on one of them. See Declaration of Burt Neuborne Concerning the Award of Attorneys' Fees, dated February 22, 2002 ("Neuborne 2002 Dec."), reprinted in DE 82 at 1. Here again, for purposes of context, I provide excerpts beyond those cited by Dubbin.
2. At the Court's suggestion, in February 1997, I assisted in organizing the plaintiffs' Executive Committee, and, with the consent of all parties, agreed to serve as co-counsel for all plaintiffs in prosecuting this litigation.... Once the Executive Committee was established, I participated fully as a member of the Executive Committee in the formulation and presentation of plaintiffs' legal position, and in the negotiations that culminated in the settlement herein. At the Court's request, I serve as Lead Settlement counsel, and have been intensively involved in the post-settlement efforts to implement the settlement herein....
3. ... Were this an ordinary class action litigation, under governing law in this Circuit, plaintiffs' counsel would be entitled to a substantial common fund fee award of between 15%-20% of the benefits generated by their efforts. Thus, were this an ordinary litigation, plaintiffs' counsel could expect to receive awards of between $200-$300 million.
4. Given the extraordinary subject matter of this litigation, however, which is designed to provide certain Holocaust survivors with a modicum of compensation after 55 years, counsel agreed among themselves (and with the Court) at the outset of this litigation that the ordinary rules governing class action compensation should not apply in these proceedings. One group of lawyers -- Melvin I. Weiss, Michael Hausfeld, and Burt Neuborne -- whose efforts ultimately proved crucial in achieving this settlement, determined that it would be inappropriate to accept fees from members of the plaintiff-class in connection with the efforts needed to bring about the settlement herein, and informed the Court at the outset of this litigation what they were prepared to undertake the case on a pro bono basis....
5. ... Repeated, inaccurate press reports stressing lawyers feuding over fees have irresponsibly fostered the stereotypical image of greedy lawyers seeking to profiteer at the expense of Holocaust victims. I urge the Court to make it clear that this litigation is an ...