FTC Capital GMBH v. Credit Suisse Group AG

Background

This memorandum and order addressed an application by Exchange-Based Plaintiffs’ class counsel for attorney’s fees related to settlements with Bank of America, Barclays, Citi, Deutsche Bank, HSBC, JP Morgan Chase, and Société Générale. The court had granted final approval of those settlements on September 17, 2020. The settlements had a combined value of $187 million.

The court had appointed Kirby McInerney LLP and Lovell Stewart Halebian Jacobson LLP as interim co-lead class counsel, together called EBP Class Counsel. Their appointment order allowed them to delegate work to other firms only when necessary to prosecute the case efficiently and avoid duplicative or unproductive work.

Work by Additional Law Firms

EBP Class Counsel’s fee application identified work by 12 additional law firms. That work represented more than 18.5% of the claimed lodestar hours and involved more than half of the attorneys who worked on the case. A lodestar is a fee calculation based on reasonable hours multiplied by reasonable hourly rates.

The court found no reason why using the 12 additional firms was necessary, efficient, or in the class’s best interests. It concluded that the additional firms’ work was duplicative, unnecessary, and could have been performed by the two appointed firms. The court therefore ruled that none of the work done by the 12 additional firms would be rewarded or credited toward the lodestar calculation. The court also concluded that the additional hours were not reasonably incurred.

The court credited EBP Class Counsel with all 65,787.36 hours they claimed, even though it observed that the number of hours suggested some over-litigation. It accepted the claimed hourly rates, which produced blended rates of approximately $860 for partners, $470 for associates, and $230 for paralegals. The resulting lodestar was $42,463,194.85.

Fee Calculation

The court used the percentage-of-fund method and then checked the result against the lodestar. Under the percentage-of-fund method, counsel receives a percentage of the settlement fund. The court considered historical class-action fee awards, fee trends in the Southern District of New York, and fee awards in other LIBOR class actions.

EBP Class Counsel had requested 30% of the settlement fund. The court found that request unreasonably high. The data supported a baseline range of approximately 17% to 25%. After considering the relevant factors, including the litigation’s magnitude and complexity, the risks, the quality of representation, and public-policy considerations, the court selected 25% of the fund remaining after expenses.

The settlement fund remaining after deducting $5,613,578.86 in expenses was $181,386,421.14. Twenty-five percent of that amount was $45,346,605.29. The lodestar cross-check produced a multiplier of 1.07, which the court said confirmed that the 25% award was reasonable.

Disposition

The court granted in part and denied in part EBP Class Counsel’s motion for attorney’s fees. It awarded EBP Class Counsel $45,346,605.29 in fees, to be paid proportionally across the settlement funds. Under the settlement arrangements and the court’s prior order, EBP Class Counsel could distribute those fees to other counsel at its discretion.

The court also approved $5,613,578.86 in litigation costs and expenses and service awards of $25,000 for each of the six named plaintiffs. Those amounts were also to be paid proportionally across the settlement funds. The clerk was directed to terminate the pending fee motions.