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In re Colgate-Palmolive Co. Erisa Litigation

United States District Court, S.D. New York

July 8, 2014

IN RE COLGATE-PALMOLIVE CO. ERISA LITIGATION. THIS DOCUMENT RELATES TO: ALL ACTIONS

Page 345

For Shari Proesel, individually, Shari Proesel, on behalf of all others similarly situated, Pamela Hosie, individually, Pamela Hosie, on behalf of all others similarly situated, Plaintiffs: Edgar Pauk, LEAD ATTORNEY, Law Office of Edgar Pauk, Brooklyn, NY; Mark K. Gyandoh, LEAD ATTORNEY, PRO HAC VICE, Edward W. Ciolko, Joseph H. Meltzer, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Douglas R. Sprong, Korein Tillery, LLC, St. Louis, MO; Joseph A. Weeden, Barroway Topaz Kessler Meltzer & Check, LLP, Radnor, PA.

For Paul Caufield, and all others similarly situated, Consolidated Plaintiff: Diane Moore Heitman, LEAD ATTORNEY, Korein Tillery LLC, St. Louis, MO; Douglas R. Sprong, LEAD ATTORNEY, PRO HAC VICE, Korein Tillery LLC, St. Louis, MO; Edward W. Ciolko, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Eli Gottesdiener, LEAD ATTORNEY, Gottesdiener Law Firm, PLLC, Brooklyn, NY; T. J. Smith, LEAD ATTORNEY, Louisville, KY; Edgar Pauk, Law Office of Edgar Pauk, Brooklyn, NY.

For Paul Abelman, on behalf of himself and on behalf of all others similarly situated, Valerie R. Nutter, on behalf of himself and on behalf of all others similarly situated, Warren Jemmott, Susan Byrd, Consolidated Plaintiffs: Edward W. Ciolko, LEAD ATTORNEY, PRO HAC VICE, Kessler Topaz Meltzer & Check, LLP (PA), Radnor, PA; Eli Gottesdiener, LEAD ATTORNEY, Gottesdiener Law Firm, PLLC, Brooklyn, NY; William Henry Blessing, LEAD ATTORNEY, Cincinnati, OH; Douglas R. Sprong, Korein Tillery, LLC, St. Louis, MO; Edgar Pauk, Law Office of Edgar Pauk, Brooklyn, NY.

For Adriana Vasquez, Cora Nelson-Manley, Consolidated Plaintiffs: Eli Gottesdiener, LEAD ATTORNEY, Gottesdiener Law Firm, PLLC, Brooklyn, NY; William Henry Blessing, LEAD ATTORNEY, Cincinnati, OH; Douglas R. Sprong, Korein Tillery, LLC, St. Louis, MO; Edgar Pauk, Law Office of Edgar Pauk, Brooklyn, NY.

For Colgate-Palmolive Company Employee Retirement Income Plan, Colgate-Palmolive Company, as Plan Administrator, Defendants: Jeffrey A. Sturgeon, PRO HAC VICE, Jeremy Paul Blumenfeld, Theresa J. Chung, Morgan, Lewis & Bockius LLP (Philadelphia), Philadelphia, PA; Joseph J. Costello, Morgan, Lewis & Bockius LLP (New York), New York, NY.

For ERC, Consolidated Defendant: Ellen Elizabeth Boshkoff, LEAD ATTORNEY, Baker & Daniels, Indianapolis, IN; Jeremy Paul Blumenfeld, Theresa J. Chung, Morgan, Lewis & Bockius LLP (Philadelphia), Philadelphia, PA; Joseph J. Costello, Morgan, Lewis & Bockius LLP (New York), New York, NY; Jeffrey A. Sturgeon, PRO HAC VICE, Morgan, Lewis & Bockius LLP (Philadelphia), Philadelphia, PA.

Page 346

ORDER & OPINION

LORNA G. SCHOFIELD, UNITED STATES DISTRICT JUDGE.

On October 9, 2013, Plaintiffs moved for preliminary approval of a $45.9 million class action settlement. The Court granted preliminary approval on December 16, 2013, and notice of the settlement and a fairness hearing was sent to class members. On April 4, 2014, the Court held a fairness hearing. No objections to the settlement were filed, and no objectors appeared at the hearing. By separate order, the Court approved the settlement as fair and adequate under Federal Rule of Civil Procedure 23(e).

Plaintiffs move for fees and costs to be paid out of the settlement fund pursuant to Federal Rule of Civil Procedure 23(h). The requested attorneys' fee is 25% of the fund or $11,475,000. Plaintiffs also move for costs of $591,011.17 and fee awards of $5,000 for each of the Plaintiffs for their participation in the litigation. The motion is granted.

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BACKGROUND

This ERISA case began in 2007 as three separate suits, filed in three jurisdictions, alleging that Defendant Colgate-Palmolive Company Employees' Retirement Income Plan, sponsored by Colgate-Palmolive Company miscalculated the pension benefits of several thousand participants from July 1, 1989 to the present. The case did not follow any similar government investigation or settlement relating to the Plan. The subject matter of this action is complex and requires a command of ERISA, the Internal Revenue Code, and related regulations and regulatory guidance. Class Counsel are Kessler, Topaz, Meltzer & Check, LLP; Korein Tillery, LLC; Gottesdiener Law Firm, PLLC; and Edgar Pauk, Esq. They are all experienced at litigating ERISA class actions. Class Counsel represent that " only a handful of ERISA lawyers around the country [are] prosecuting actions like the instant case as most large class-action firms and ERISA lawyers shun them because they lack the requisite expertise."

The case was litigated for more than three years, and then the settlement was negotiated for another three years. I received the case on reassignment and presided over settlement negotiations for approximately the last year. Class Counsel's work on the litigation included investigating and filing the Complaint, conducting targeted document discovery, working with outside actuarial experts, and briefing a motion to dismiss. The settlement negotiations included three mediations conducted in 2010, for which counsel prepared detailed mediation statements, as well as extensive involvement by and consultation with the parties' actuarial experts since then to finalize the settlement. Ultimately, certain claims known as the Residual Annuity Claims were excluded from the scope of the settlement.

Under the Settlement, the Plan will pay approximately $45.9 million in additional gross settlement benefits to 8,612 current and former Plan participants (or beneficiaries)--an average of $5,330 per person. Class Counsel worked a total of 3,915 billable hours on this matter. This represents work performed up to March 9, 2014, and excludes time spent preparing and arguing the motion to approve the settlement and attorneys' fees, and time that will be spent administering the settlement. If attorneys' fees were calculated on an hourly basis at current rates, the total fee or " lodestar" would be $2,200,927. A fee award of 25% of the fund or $11,475,000 would represent a multiplier of 5.2 of the lodestar.

LEGAL STANDARD

In Rule 23 class actions, the " attorneys whose efforts created the fund are entitled to a reasonable fee -- set by the court -- to be taken from the fund." Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir. 2000). " What constitutes a reasonable fee is properly committed to the sound discretion of the district court . . . and will not be overturned absent an abuse of discretion . . . ." Id. The reasonableness of a fee in this Circuit is evaluated considering the Goldberger factors: " (1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of the litigation . . . ; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations." Goldberger v. Integrated Res., Inc., 209 F.3d at 50 (omission in original).

District courts in this Circuit may use one of two methods as a starting point to analyze attorneys' fees. Goldberger, 209 F.3d at 50. One method is the " lodestar" method, by which the district court multiplies the reasonable hours billed by a reasonable hourly rate. See id.

Page 348

at 47. Once that computation is made, the district court may adjust the multiplier based on other factors such as the risk of the litigation or the performance of the attorneys. See id. The second method is the " percentage of the fund" method, which is the trend in this Circuit. Wal-Mart Stores, Inc. v. Visa U.S.A. Inc, 396 F.3d 96, 121 (2d Cir. 2005). Under the percentage method, the fee is a reasonable percentage of the total value of the settlement fund created for the class. See Goldberger, 209 F.3d at 47. The percentage method " directly aligns the interests of the class and its counsel and provides a powerful incentive for the efficient prosecution and early resolution of litigation." Wal-Mart Stores, Inc., 396 F.3d at 121. In contrast, the lodestar method creates " a disincentive to early settlements, tempts lawyers to run up their hours, and compels district courts to engage in a gimlet-eyed review of the line-item fee audits." Id. at 121 (internal quotation marks, citations and alterations omitted). The percentage method is used to evaluate the attorneys' fees in this case.

DISCUSSION

I. Attorneys' Fees


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