Walsh v. Buchholz

Background

In connection with the request for final approval of a class settlement, Class Counsel moved under Federal Rule of Civil Procedure 23(h) for attorneys’ fees, reimbursement of litigation expenses, and service awards. The settlement fund was $11,600,000. Defendants did not oppose the motion, and no class members objected after receiving notice of the requested awards.

Class Counsel requested fees equal to 33.3% of the settlement fund, $570,371 for litigation costs and expenses, and $150,000 in service awards. The requested service awards were $25,000 for each of two class representatives and $20,000 for each of five named plaintiffs, according to the order’s description of the request.

Court’s Reasoning

The court approved the 33.3% fee award. Class Counsel recorded more than 8,146 hours of work, including pre-filing investigation, fact and expert discovery, motions, settlement negotiations, mediations, settlement conferences, and preparation for a multi-week trial. Using the attorneys’ and staff members’ hourly rates, which ranged from $1,225 to $207 per hour, the recorded fees totaled $6,991,880. The requested percentage award represented approximately 55% of that amount and preserved more of the settlement fund for class members than the hourly-fee calculation would have done.

The court also found the fee reasonable under the factors courts use to evaluate class-action fee requests. It noted that the percentage was within the expected range for similar cases, no class member objected, and the settlement provided an above-average, tangible, and immediate benefit to shareholders who otherwise had received no return on their invested capital. The case was handled on a contingent-fee basis, involved complex issues concerning the fairness of a corporate merger, was extensively litigated over five years, and presented a risk that Class Counsel could recover nothing at trial or face delays or reversal after trial.

The court approved the requested $570,371 in costs and expenses. The expenses mainly involved expert fees, travel, discovery, mediation, filing fees, and document copying and preparation. The court found the categories related to the case and the amounts reasonable because the case settled shortly before trial after years of litigation.

For service awards, the court considered declarations from the proposed recipients. They described reviewing the complaint, responding to discovery, preparing for and attending depositions, reviewing filings, attending conference calls, corresponding by email, participating in mediation, and providing opinions during settlement discussions. Their estimated time ranged from 150 to 350 hours. Five of the six recipients also described receiving months of emails, phone calls, and letters urging them to drop the lawsuit after their contact information was disclosed by other shareholders. The court concluded that the evidence did not show unusual harassment, especially valuable involvement, or noteworthy time beyond what would be expected in a contested shareholder dispute.

Order

The court granted Class Counsel’s motion for attorneys’ fees, reimbursement of litigation expenses, and approval of service awards. It approved attorneys’ fees equal to 33.3% of the settlement fund and approved $570,371 in costs and expenses. It approved two $20,000 service awards for the class representatives and five $16,000 service awards for the named plaintiffs, rather than the larger amounts requested. The approved fees and expenses were ordered to be paid to Class Counsel according to the settlement agreement.