Third Circuit Task Force, E108 F.R.D. at 246-49.F Still, a court may (but need not) calculate the lodestar to double check the fee it awards under the percentage-of-recovery method. General Motors, 55 F.3d at 821 & n.40.
B. Counsel's Requests
Counsel for the plaintiff class urge the court to adopt the percentage-of-recovery approach to calculate their legal fees. They request an award of $ 3,239,373.00. This figure represents 2.829% of the $ 114,500,000.00 settlement obtained for the class. Using the lodestar method, the court would apply a multiplier of 2.39 to a lodestar of $ 1,356,641 to achieve the requested award amount.
The Separate Petitioners propose a cap of $ 2,500,000 on attorneys' fees. They contend that while the Settlement provides for an award of up to $ 3.5 million in attorneys' fees and costs, the court should only award $ 2.5 million and allow the additional one million dollars to be used to provide benefits for class members. The Separate Petitioners assert that the court may award either a percentage of the common fund or perform a lodestar analysis and then adjust the lodestar to accommodate certain considerations such as risk and quality of legal assistance. To achieve the lower attorneys' fee award, the Separate Petitioners propose that this court calculate the lodestar and apply a multiplier of 1.65. Alternatively, such an award represents 1.95% of the $ 114.5 million settlement. The Separate Petitioners do not assert that the request set forth in the Joint Petition is unreasonable; indeed, Separate Petitioners agree that there is a range of reasonableness for the appropriate attorneys' fees and suggest that 1.9, 2.3, even 10 percent would be a reasonable award in this case. They claim, however, that a cap of $ 2.5 million for attorneys' fees and costs will achieve a result that will both properly reward class counsel and provide additional benefits to their clients, the class.
Finally, in its amicus curiae brief, Federal argues that an award calculated under the lodestar method, unenhanced by the application of a multiplier, will sufficiently and fully compensate counsel for their efforts in achieving settlement in this case. Federal contends that any greater amount would be unreasonable. Moreover, Federal asserts that City of Burlington v. Dague precludes the use of both a multiplier and the percentage-of-recovery method of calculating fees and, instead, requires the court to apply the pure lodestar method in light of ERISA's fee-shifting provision.
The choice of methodology used to calculate attorneys fees "rest[s] within the district court's sound discretion." General Motors, 55 F.3d at 821. Guided by principles set forth by courts in the Third Circuit, the court here determines that in this case the percentage-of-recovery approach is most appropriate. Although the claims in the underlying class action were brought under ERISA, which contains a fee-shifting provision, the fact that the settlement creates a fund that buys benefits for class members and provides a sum certain from which the fee award is to be paid counsels the court to apply "common fund" principles and the percentage-of-recovery method. Accord In re Unisys Corp. Retiree Med. Benefits ERISA Litig., 886 F. Supp. 445, 456, 459-60 (E.D. Pa. 1995); McLendon v. Continental Group, Inc., 872 F. Supp. 142, 154-57 (D.N.J. 1994); see also In re Plastic Tableware Antitrust Litig., 1995 U.S. Dist. LEXIS 18166, at *2-3, Master File No. 94-CV-3564 (E.D. Pa. November 30, 1995).
The court rejects the lodestar analysis in this case in light of its widely recognized shortcomings, especially as applied to common fund situations.
See General Motors, 55 F.3d at 821; Third Circuit Task Force, E108 F.R.D. at 246-53, 255-58F. Similarly, the court declines to reduce the negotiated cap on attorneys' fees from $ 3.5 million to $ 2.5 million as suggested by the Separate Petitioners. Although such a downward adjustment would necessarily increase the amount of money available to the plaintiff class, the court believes that the resulting lower attorneys' fee will not reward counsel for plaintiffs sufficiently for their diligence and skill in crafting the settlement. As such, even after deducting $ 3.5 million dollars from the fund that finances the class members' benefits, the remaining monies adequately allow for the successful implementation of a fair and reasonable settlement plan.
In applying "common fund" principles and a percentage-of-recovery calculation, the court must protect both class and counsel. In particular, the court must ensure that counsel receive appropriate compensation for their efforts in generating the fund from which class members benefit; otherwise, the class would be unjustly enriched by obtaining a plum reward for a mere pittance. In approving the settlement, the court acknowledged--and acknowledges now again--the complexity of the issues in this case, the significant attendant risks of proceeding with litigation, and the tenacity and vigor with which all counsel represented their clients' interests. The efforts of counsel over a period of four years brought about the fair, reasonable, and adequate result of this monumental settlement which guarantees 12,000 class members medical benefits for the remainder of their lives; these efforts must be rewarded properly and counsel compensated appropriately.
As noted previously, counsel for the plaintiff class have requested an attorneys' fee award in the amount of 2.829% of the $ 114,500,000.00 settlement figure. At the January 10 hearing during which the court approved the settlement as fair, reasonable and adequate, only 134 of the 12,000 class members voiced concern or opposition to the settlement; all other class members approved it in its entirety. In the same vein, class members did not enter any objections to the request for attorneys' fees, not in written form nor in person at the hearing for approval of the settlement.
On their own accord and in recognition of their clients' limited financial means, counsel for the plaintiff class have requested an attorneys' fee award at a percentage rate far below the customary amount courts have granted in comparable cases. See General Motors, 55 F.3d at 822 (noting class action fee awards range from 19 to 45%); Unisys, 886 F. Supp. at 461-62 (noting percentage-of-recovery awards range 19 to 45% generally, 4 to 10% where fund is between $ 100 and $ 200 million). That request--for 2.829% of a $ 114,500,000 settlement--this court finds reasonable, especially in light of both the size and the unique structure of the settlement counsel achieved for the class. An award of $ 3,239,373 provides just compensation for experienced counsel who wagered significant sums over the course of several years and achieved a tremendous and invaluable result for their clients. The class members, in turn, retain all that the settlement provides; they do not lose any of the negotiated benefits on account of an attorneys' fee and costs award that equals the "cap" on such an award set forth in the settlement.
Plaintiffs' counsel request reimbursement for expenses and costs in the amount of $ 260,627.16. This figure is uncontested. Moreover, counsel have provided the court comprehensive documentation to support their request. Most important, the extensive and complex nature of this sizeable class action, the great effort expended by all counsel involved, and the necessity for incurring the expenses, all together render counsel's request fair and reasonable. The court approves an award of $ 260,627.16 in costs and expenses to plaintiffs' counsel.
For the foregoing reasons, the court awards to counsel for plaintiffs attorneys' fees in the amount of $ 3,239,373 and reimbursement of costs and expenses in the amount of $ 260,627.16. The court will enter an appropriate order.
Dated: 24 February, 1997
STANLEY S. BROTMAN
UNITED STATES DISTRICT JUDGE
THIS MATTER having come before the court on plaintiffs' counsel's petitions for attorneys' fees and costs;
The court having considered the petitions of counsel and the submissions of amicus curiae ;
For the reasons set forth in the court's opinion of this date;
IT IS this 24 day of February, 1997 HEREBY
ORDERED that counsel for plaintiffs are awarded attorneys' fees in the amount of $ 3,239,373 and reimbursement of costs and expenses in the amount of $ 260,627.16. These amounts are to be deducted from the Settlement Amount. These awards shall be paid in cash by Campbell Soup Company as provided in paragraphs 6.2.1 and 6.2.2 of the Settlement Agreement. These awards will bear simple interest at the rate per annum of 5% or prime (calculated at the rate per annum equal to the prime rate publicly announced from time to time by Morgan Guaranty Trust Company of New York in New York City), whichever rate is lower, from the date of this Order until the date the awards are paid, which interest shall be credited against and reduce the Settlement Amount. Counsel for plaintiffs may petition the Court for award of additional fees and expenses relating to the consummation and administration of the settlement. Such supplemental petitions may be made without notice to the class.
DATED: February 24, 1997
STANLEY S. BROTMAN
UNITED STATES DISTRICT JUDGE