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BAGEL INN, INC. v. ALL STAR DAIRIES

February 26, 1982

BAGEL INN, INC., etc., Plaintiff,
v.
ALL STAR DAIRIES, et al., Defendants



The opinion of the court was delivered by: MEANOR

This action was commenced on behalf of all private persons within the State of New Jersey who purchased, directly from defendants, dairy products for resale or further processing. In the complaint, filed in this court on August 15, 1980, it is alleged that defendants combined and conspired to raise, fix, and maintain prices of dairy products in New Jersey. After months of discovery, a settlement was consummated between the parties. On October 1, 1981, $ 2,150,000 was placed in escrow and invested in an interest bearing instrument at an annual rate of 163/4 percent.

In accordance with Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975), the members of the purported class were notified and a hearing was scheduled to evaluate the proposed settlement. The parties submitted briefs, affidavits and documentation in support of the motion to approve the settlement. No class member objected to the terms of the agreement. On December 21, 1981, I issued an oral opinion from the bench approving the settlement. I found that the agreement was eminently fair and well within the range of reasonableness in light of the best possible recovery for the class and the attendant risks in litigation.

 In conjunction with the motion to approve the settlement, plaintiffs' counsel submitted a petition for attorney fees with voluminous supporting documentation. I reserved my decision on that issue in order to devote the requisite amount of time and analysis to counsel's request. The assessment of a reasonable allowance for attorney's fees is the subject of this opinion.

 The Lindy Standards.

 In assessing the amount of attorneys' fees in this class action, I am bound by the principles enunciated in the seminal decisions of the Court of Appeals for the Third Circuit in Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) (Lindy I ) and Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1975) (Lindy II ). The analysis to be employed by this court is explicitly set forth in these opinions. In Lindy I, the Court instructed as follows:

 
In detailing the standards that should guide the award of fees to attorneys successfully concluding class suits, by judgment or settlement, we must start from the purpose of the award: to compensate the attorney for the reasonable value of services benefiting the unrepresented claimant. Before the value of the attorney's services can be determined, the district court must ascertain just what were those services. To this end the first inquiry of the court should be into the hours spent by the attorneys-how many hours were spent in what manner by which attorneys.
 
....
 
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The value of an attorney's time generally is reflected in his normal billing rate. A logical beginning in valuing an attorney's services is to fix a reasonable hourly rate for his time-taking account of the attorney's legal reputation and status (partner, associate). Where several attorneys file a joint petition for fees, the court may find it necessary to use several different rates for the different attorneys.

 Lindy I, 487 F.2d at 167.

 The amount determined under the above analysis has been denominated the "lodestar" figure. Lindy I and progeny make clear that this sum is to form the basis of the court's overall fee computation. See Baughman v. Wilson Freight Forwarding Co., 583 F.2d 1208, 1217-18 (3d Cir. 1978). Plaintiffs' counsel bear the burden of establishing the amount of a reasonably hourly rate. It is the responsibility of this court to scrutinize the rate to ensure that it is fair and reasonable in light of the circumstances involved in the present litigation. Id. at 1217.

 After establishing the lodestar figure, at least two other factors are to be considered in order to assess the total award. In Lindy I, the Court explained:

 
The first of these is the contingent nature of success; this factor is of special significance where, as here, the attorney has no private agreement that guarantees payment even if no recovery is obtained. In assessing the extent to which the attorneys' compensation should be increased to reflect the unlikelihood of success, the district ...

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