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IN
THE UNITED STATES DISTRICT COURT
FOR
THE DISTRICT OF COLORADO
Civil
Action No. 95-B-2525
JOHN
VASZLAVIK, et al.,
Plaintiffs,
v.
STORAGE
TECHNOLOGY CORPORATION, a Delaware Corporation, doing business
in Colorado,
Defendant.
ORDER
GRANTING CLASS COUNSEL’S PETITION FOR ATTORNEY FEES AND COSTS
BABCOCK,
Judge
I.
INTRODUCTION
THIS
MATTER is before the Court in connection with Class Counsel’s
Petition for attorney’ Fees and Costs. In their Petition,
class counsel, the law firm of Roman, Benezra & Culver,
L.L.C., assisted by Todd J. McNamara, P.C., has asked this
Court to compensate them for their role in obtaining a settlement
of class claims under the Age Discrimination in Employment
Act ("ADEA") and the Employee Retirement Income
Security Act ("ERISA"). The settlement provides
a $5 million monetary recovery for the 417 member ADEA collective
action, as well as significant affirmative relief for the
approximately 1,226-member ERISA class.
Specifically,
class counsel has asked this Court to award them a fee of
30% of the monetary settlement obtained or $1.5 million. Class
counsel has also asks this Court to award it $309,252.41 for
outstanding costs.
In
a court approved notice regarding the terms of the ADEA settlement,
collective action members were advised of class counsel’s
request and were given an opportunity to object. No objections
were received regarding class counsel’s request for fees and
costs.
On
March 8, 2000, this Court conducted a hearing regarding the
Stipulation for Approval of Class Settlement, as well as class
counsel’s fee Petition. Based upon my observation of counsel’s
conduct during this litigation, my knowledge of the difficult
legal issues facing the Plaintiffs, and a review of class
counsel’s Petition for attorney’ Fees and Costs and Supplemental
Information and Authority In Support of its Petition, I granted
counsel’s request. This Order explains my findings and conclusion
that counsel’s fee and cost request is reasonable and merited.
II.
FINDINGS AND CONCLUSIONS
A. Class
Counsel’s Request For attorney’ Fees
attorney’
fees are awarded to class counsel under the common benefit
doctrine. (Hall v. Cole, 412 U.S. 1, 5 (1973).) When
a settlement yields a fund for class members, fees must be
paid from the recovery. (Boeing Co. v. VanGemert, 444
U.S. 472, 481 (1980)).
Courts
have applied one of two methods for determining attorney’
fee awards in common fund cases: (1) by a "percentage
of the fund"; or (2) by the "lodestar plus multiplier"
or "enhanced lodestar", which multiplies the reasonable
hours expended by a reasonable hourly rate, and finally by
an additional percentage to compensate for risk. (Uselton
v. Commercial Loveless Motor Freight, Inc., 9 F.3d 849,
853 (10th Cir. 1993); Rosenbaum v. MacAllister,
64 F.3d 1439, 1445 (10th Cir. 1995).) While enhanced
lodestar cases remain instructive, the Tenth Circuit has expressed
"a preference for the percentage of the fund method"
in common fund cases. (Rosenbaum, 64 F.3d at 1445,
quoting Gottlieb v. Barry, 43 F.3d 474, 483
(10th Cir. 1994).)
Fees
for class action settlements generally range from 20%-50%.
(Maywalt v. Parker and Parsley Petroleum Co., 963 F.Supp.
310 (S.D. N.Y. 1997); Naturalizer Production Liability
Litigation, 1996 W.L. 780512, p. * 14 (E.D. Mich. 1996);
In re Combustion, Inc., 968 F.Supp. at 1132).) Regardless
of whether a percentage of the fund or enhanced lodestar approach
is used, class action fee awards are typically 30% of the
fund created by the settlement. (In re Activision Securities
Litigation, 723 F.Supp. 1373, 1375-78 (N.D. Cal. 1989)
(30% should be awarded "absent exceptional circumstances").)
The
Tenth Circuit has concluded that whichever method for fee
calculation is employed, the District Court must consider
the 12 factors articulated in Johnson v. Georgia Highway
Express, Inc., 488 F.2d 714, 717-19 (5th Cir.
1974). (Gottlieb, 43 F.3d at 483; Rosenbaum,
64 F.3d at 1445). The Johnson factors include: (1)
the time and labor required; (2) the novelty and difficulty
of the question presented by the case; (3) the skill requisite
to perform the legal services properly; (4) the preclusion
of other employment by the attorney due to the acceptance
of the case; (5) the customary fee; (6) whether the fee is
fixed or contingent; (7) any time limitations imposed by the
client or the circumstances; (8) the amount involved and the
results obtained; (9) the experience, reputation, and ability
of the attorney; (10) the undesirability of the case; (11)
the nature and length of the professional relationship with
the client; and (12) awards in similar cases. (Id.)
Applying
the Johnson factors to this case, I find that an award
of 30% of the common fund is reasonable and warranted.
1. Time
And Labor Required
This
litigation required class counsel to commit vast amounts of
time and labor in order to obtain a favorable settlement.
A Complaint on behalf of three named Plaintiffs alleging class-wide
discrimination was filed on October 2, 1995. In the more than
four years this case was litigated, Plaintiffs’ counsel invested,
at least, 6,043.90 hours, incurring attorney’ fees of $977,517.75.
I find that this fee was reasonable. In fact, based on my
knowledge of fees charged in complex litigation nationally,
I find that the hourly rates charged by class counsel were
on the low side, even in the District of Colorado.
Counsel’s
considerable investment of time and labor was reasonable and
necessary in such a complex case. Plaintiffs’ claims arose
out of the layoff of more than 2,000 employees, and involved
two certified classes. Both parties aggressively
litigated the case. Plaintiffs produced 28,693 pages of documents,
while Defendant produced 150,158 pages of documents. Plaintiffs’
counsel took 91 depositions and defended 74 depositions taken
by Defendant. There are 239 pleadings in Plaintiffs’ files,
including 66 motions filed by Plaintiffs and 48 filed by Defendant.
Plaintiffs’ counsel interviewed approximately 250 witnesses
and secured affidavit testimony from 63 of those witnesses.
The parties designated a total of nine expert witnesses. At
the time of settlement, discovery had been completed, a Pretrial
Order entered, trial exhibits exchanged, and with the exception
of dispositive motion rulings, the parties were ready for
trial.
A
30% fee, or $1.5 million, is highly appropriate given the
time and labor expended. A 30% award only constitutes a 1.53
multiplier of the lodestar. Courts in common fund cases regularly
award multipliers of two to three times the lodestar or more
to compensate for risk and to reflect the quality of the work
performed. (Ressler v. Jacobson, 149 F.R.D. 651, 653
fn. 4 (M.D. Fla. 1992) (compiling cases); In re Combustion,
Inc., 968 F.Supp. at 1133-34) (compiling cases); Mister,
et al. v. Illinois Central Gulf R.R., No. 81-3006 (S.D.
Ill. August 5, 1993), (compiling cases).)
2. Novelty
And Difficulty Of The Question Presented By The Case
As
discussed in my Order Approving Class Settlement and Dismissing
Class Claims With Prejudice, there were numerous difficult,
complex, and uncertain legal and factual issues presented
in this case. The law regarding pattern and practice ADEA
and ERISA cases is particularly uncertain. In this case, there
were numerous unresolved legal issues regarding the validity
of Plaintiffs’ statistical proof, the weight to be given the
anecdotal evidence, and the propriety of maintaining class
certification status. I find that the novelty and difficulty
of the legal and factual issues presented by this case weighs
heavily in favor of the fees requested.
3. The
Skill Requisite To Perform The Legal Services Properly
As
discussed, this case involved numerous extremely complex and
difficult legal and factual issues, many of which have not
been fully resolved by the Courts. Litigating such complex
issues required a high degree of specialized skill in employment
law and complex litigation.
4. The
Preclusion Of Other Employment By The attorney Due To Acceptance
Of The Case
Class
litigation of this magnitude inherently entails significant
opportunity costs. In this case, the opportunity costs were
particularly significant, given that Plaintiffs’ counsel was
comprised of a small three-attorney law firm with the assistance
of one other attorney and limited associate support. Class
counsel’s obligation to zealously pursue this enormous case
no doubt cost them significant opportunities to earn other
compensation through the litigation of less burdensome cases.
The opportunity costs incurred by class counsel also weigh
heavily in favor of the requested fee.
5. The
Customary Fee
Based
on my experience with common fund fee awards, I conclude that
a 30% contingent fee is well within the normal range of fee
awards.
6. Whether
The Fee Is Fixed Or Contingent
Class
counsel pursued this case on a contingent fee, whereby they
would receive no compensation for their labor if they did
not obtain a successful outcome, either through settlement
or judgment. Given the risk of non-recovery, this factor weighs
heavily in favor of the requested fee.
7. Time
Limitations Imposed By The Client Or The Circumstances
I
find that the size and magnitude of this case clearly imposed
significant time limitations on the small civil rights law
firm representing the class. The time limitations were particularly
significant given the prospect for a two-month liability trial,
subsequent appeals, and remedial proceedings for individual
damages.
8. The
Amount Involved And The Results Obtained
Through
the efforts of class counsel, two classes were certified by
this Court, one of which will divide a settlement of $5 million
and a second which will benefit from the implementation of
significant affirmative relief. Given the considerable risk
that the Plaintiffs would recover nothing for their efforts,
this result supports the requested fee.
9. The
Experience, Reputation, And Ability Of The attorney
Based
on my observation of their prosecution of this case, I find
that Benezra & Culver, L.L.C. pursued this litigation
in a tenacious and articulate manner. Their experience, reputation,
and ability is exceptional.
10. The
Undesirability Of The Case
I
find that this was an undesirable case for counsel to undertake
given the risk of no recovery and the uncertainty of the governing
law. 11. The
Nature And Length Of The Professional Relationship With The
Client
Class
counsel’s only relationship with the class was in the context
of this litigation.
12. Awards
In Similar Cases
I
find that the requested fee of 30% of the settlement is well
within the ordinary range of common fund fee awards. A 30%
common fund fee award is in the middle of the ordinary 20%-50%
range and is presumptively reasonable.
B. The
Requested Costs
As
with attorney’ fees, an attorney who creates or preserves
a common fund for the benefit of a class is entitled to receive
reimbursement of all reasonable costs incurred. (See
e.g. Blum, 465 U.S. at 573). Costs are awarded
in addition to the attorney fee percentage. (In re Business
Land Security Litigation, (1991) Fed. Sec. L. Rep. (CCH)
§ 96, 059 (N.D. Cal. June 14, 1991) (cases collected).)
Given
my experience with actions of this magnitude and the inherent
expense of pattern and practice employment discrimination
actions, particularly with respect to the essential statistical
expert analysis, I conclude that class counsel’s request that
it be reimbursed for $309,252.41 in outstanding costs is fair
and reasonable.
III.
CONCLUSION
After
consideration of counsel’s Petition, I conclude that the requested
attorney’ fees and cost reimbursements are fair and merited.
Accordingly, it is
ORDERED
that the requested 30% attorney’ fee, or $1.5 million is APPROVED.
It is
FURTHER
ORDERED that the requested reimbursement of $309,252.41
in outstanding costs is APPROVED
BY
THE COURT:
IN
THE UNITED STATES DISTRICT COURT
FOR
THE DISTRICT OF COLORADO
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Benezra & Culver L.L.C.