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In re Citigroup Inc. Bond Litig.

United States District Court, S.D. New York

December 19, 2013

IN RE CITIGROUP INC. BOND LITIGATION

For Louisiana Sheriffs' Pension and Relief Fund, On behalf of itself and all others similarly situated, Plaintiff: Andrew L Zivitz, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; Benjamin J. Sweet, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; David Kessler, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Jennifer L. Keeney, Richard A Russo, Jr, LEAD ATTORNEYS, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; John Patrick Coffey, Steven B. Singer, John Christopher Browne, LEAD ATTORNEYS, David Lloyd Wales, Gerald H. Silk, John James Rizio-Hamilton, Kurt Michael Hunciker, Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Elizabeth P. Lin, PRO HAC VICE, Bernstein Litowitz Berger & Grossmann LLP, San Diego, CA; Kristin Ann Meister, Alston & Bird, LLP(NYC), New York, NY; Stefanie Jill Sundel, Bernstein, Litowitz, Berger & Grossman, New York, NY.

For Louisiana Municipal Police Employees' Retirement System, On behalf of itself and all others similarly situated, Plaintiff: Andrew L Zivitz, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; Benjamin J. Sweet, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; David Kessler, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Jennifer L. Keeney, Richard A Russo, Jr, LEAD ATTORNEYS, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Steven B. Singer, John Patrick Coffey, John Christopher Browne, LEAD ATTORNEYS, Gerald H. Silk, John James Rizio-Hamilton, Kurt Michael Hunciker, Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Elizabeth P. Lin, PRO HAC VICE, Bernstein Litowitz Berger & Grossmann LLP, San Diego, CA; Kristin Ann Meister, Alston & Bird, LLP(NYC), New York, NY.

For Minneapolis Firefighters' Relief Association, Plaintiff: Andrew L Zivitz, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; Benjamin J. Sweet, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; David Kessler, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Jennifer L. Keeney, Richard A Russo, Jr, LEAD ATTORNEYS, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Steven B. Singer, John Christopher Browne, LEAD ATTORNEYS, John James Rizio-Hamilton, Kurt Michael Hunciker, Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Elizabeth P. Lin, PRO HAC VICE, Bernstein Litowitz Berger & Grossmann LLP, San Diego, CA; Kristin Ann Meister, Alston & Bird, LLP(NYC), New York, NY; Stefanie Jill Sundel, Bernstein, Litowitz, Berger & Grossman, New York, NY.

For City of Tallahassee Retirement System, City of Philadelphia Board of Pensions and Retirement, Miami Beach Employees' Retirement Plan, Southeastern Pennsylvania Transit Authority, Plaintiffs: Richard A Russo, Jr, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Andrew L Zivitz, Alessandra Cristina Phillips, PRO HAC VICE, Benjamin J. Sweet, Sharan Nirmul, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; David Lloyd Wales, Kurt Michael Hunciker, Mark Lebovitch, Steven B. Singer, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Elizabeth P. Lin, PRO HAC VICE, Bernstein Litowitz Berger & Grossmann LLP, San Diego, CA; Jennifer L. Keeney, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Matthew Leo Mustokoff, David Kessler, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA.

For American European Insurance Company, Plaintiff: Andrew L Zivitz, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; Benjamin J. Sweet, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP, Radnor, PA; Jennifer L. Keeney, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; David Kessler, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; David Kessler, LEAD ATTORNEY, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; David Lloyd Wales, Kurt Michael Hunciker, Mark Lebovitch, Steven B. Singer, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Elizabeth P. Lin, PRO HAC VICE, Bernstein Litowitz Berger & Grossmann LLP, San Diego, CA.

Lionel Asher, Consolidated Plaintiff, Pro se.

Mary J. Asher, Consolidated Plaintiff, Pro se.

For CitiGroup, Inc., Charles Prince, Sallie L. Krawcheck, John C. Gerspach, C. Michael Armstrong, Alain J.P. Belda, George David, Kenneth T. Derr, John M. Deutch, Roberto Hernandez Ramirez, Ann Dibble Jordan, Klaus Kleinfeld, Andrew N. Liveris, Dudley C. Mecum, Ann M. Mulcahy, Richard D. Parsons, Judith Rodin, Robert E. Rubin, Franklin A. Thomas, Defendants: Richard A. Rosen, Brad Scott Karp, LEAD ATTORNEYS, Jane Baek O'Brien, Paul, Weiss, Rifkind, Wharton & Garrison LLP (NY), New York, NY; Kevan Daniel Choset, Sharon L. Schneier, Davis Wright Tremaine LLP (NYC), New York, NY.

For Sanford I. Weill, Defendant: Brad Scott Karp, Richard A. Rosen, LEAD ATTORNEYS, Paul, Weiss, Rifkind, Wharton & Garrison LLP (NY), New York, NY.

For Citigroup Global Markets Inc., JPMorgan Chase & Co., Goldman Sachs & Co., UBS Securities LLC, Banc of America Securities LLC, Barclays Capital Inc., Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Greenwich Capital Markets Inc., Citigroup Global Markets Limited, Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley & Co. Inc., Wachovia Capital Securities, LLC, Defendants: George Abraham Zimmerman, Jay B. Kasner, LEAD ATTORNEYS, Skadden, Arps, Slate, Meagher & Flom LLP (NYC), New York, NY; Gary John Hacker, Skadden, Arps, Slate, Meagher & Flom, LLP (IL), Chicago, IL.

For Citigroup Capital XIV, Citigroup Capital XV, Citigroup Capital XVI, Citigroup Capital XVII, Citigroup Capital XIX, Citigroup Capital XX, Citigroup Capital XXI, Sir Winfried Bischoff, Gary Crittenden, Vikram Pandit, Saul Rosen, Robert L. Ryan, Defendants: Richard A. Rosen, LEAD ATTORNEY, Paul, Weiss, Rifkind, Wharton & Garrison, LLP (NY), New York, NY; Jane Baek O'Brien, Paul, Weiss, Rifkind, Wharton & Garrison, LLP (NY), New York, NY; Kevan Daniel Choset, Sharon L. Schneier, Davis Wright Tremaine LLP (NYC), New York, NY.

For Citigroup Capital XVIII, Defendant: Brad Scott Karp, Richard A. Rosen, LEAD ATTORNEYS, Paul, Weiss, Rifkind, Wharton & Garrison, LLP (NY), New York, NY; Jane Baek O'Brien, Paul, Weiss, Rifkind, Wharton & Garrison, LLP (NY), New York, NY; Kevan Daniel Choset, Sharon L. Schneier, Davis Wright Tremaine LLP (NYC), New York, NY.

For Office of the Comptroller of the Currency, ADR Provider: Ernest Clifford Barrett, U.S. Office of The Comptroller of The Currency, Washington, DC.

For The Clearing House Association L.L.C., Amicus: Sharon L. Nelles, Sullivan & Cromwell, LLP(NYC), New York, NY.

For Board of Governors of the Federal Reserve System, Intervenor: Yvonne Facchina Mizusawa, LEAD ATTORNEY, Board of Governors of The Federal Reserve System, Washington, DC.

For Federal Deposit Insurance Corporation, Intervenor: Thomas M. Clark, LEAD ATTORNEY, Federal Deposit Insurance Company (NYC), New York, NY; Thomas L Holzman, PRO HAC VICE, Federal Deposit Insurance Corporation-Legal Division, Arlington, VA.

OPINION

Page 372

OPINION & ORDER

Sidney H. Stein, U.S. District Judge.

In August, this Court approved the settlement of this securities class action, which was brought on behalf of a class of purchasers of bonds issued by or on behalf of Citigroup, Inc. and raised claims pursuant to the Securities Act of 1933. Plaintiffs agreed to settle all claims in exchange for a payment of $730 million--an agreement that the Court found to be fair, reasonable, and adequate. See generally In re Citigroup Inc. Bond Litig., No. 08 Civ. 9522 (SHS), 296 F.R.D. 147, 2013 WL 4427195 (S.D.N.Y. Aug. 20, 2013). Plaintiffs' attorneys, Bernstein Litowitz Berger & Grossman LLP, seek an award of attorneys' fees and reimbursement of litigation expenses pursuant to Federal Rule of Civil Procedure 23(h), as well as reimbursement of costs and expenses incurred by class representatives pursuant to the Private Securities Litigation Reform Act of 1995 (" PSLRA" ), 15 U.S.C. § 78u--4. The Court has reviewed Bernstein Litowitz's request and finds that it is entitled to both an award of reasonable attorneys' fees and reimbursement of litigation expenses. The Court also awards reasonable costs and expenses for services rendered to the class by the lead plaintiffs.

I. Fee Award

Rule 23(h) permits the Court to award reasonable attorneys' fees in a certified class action. Indeed, the U.S. Supreme Court has long recognized that " a lawyer who recovers a common fund for the benefit of persons other than himself or his

Page 373

client is entitled to a reasonable attorney's fee from the fund as a whole." Boeing Co. v. Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980); see also, e.g., In re Am. Bank Note Holographics, Inc., 127 F.Supp.2d 418, 430 (S.D.N.Y. 2001) (" [A]ttorneys who create a common fund to be shared by a class are entitled to an award of fees and expenses from that fund as compensation for their work." ). Class counsel Bernstein Litowitz has moved for such an award here, seeking 20% of the common fund, or $146 million, plus interest.

Although the firm is certainly deserving of an award for its efforts in this litigation--for which it has yet to receive compensation--the Court finds the requested percentage too high given the significant size of the fund. See Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 123 (2d Cir. 2005) (noting that the " sheer size" of a fund made " a smaller percentage" award appropriate because it nonetheless produced a " generous fee" ). For the reasons explained below, the Court instead finds reasonable an award of attorneys' fees of 16% of the settlement amount, or $116.8 million. To ensure the fairness of this percentage, the Court performs a " cross-check," comparing the amount of the award to the approximate market value of plaintiffs' attorneys' work--known as the lodestar figure--to ensure that the percentage of the fund method yields appropriate compensation without resulting in a windfall for plaintiffs' attorneys. See id . Finally, the Court confirms the reasonableness of the fee determined by the ...


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