Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 1 of 24 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK.

Transcription

1 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 1 of 24 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ANDREA BARRON, on behalf of herself and all others similarly situated, Plaintiff, v. ROMAN IGOLNIKOV, SHELDON S. GORDON, MATTHEW STADTMAUER, UNION BANCAIRE PRIVÉE, UNION BANCAIRE PRIVÉE ASSET MANAGEMENT LLC, UBPI HOLDINGS, INC., DANIEL DE PICCIOTTO, MICHAEL DE PICCIOTTO, GUY DE PICCIOTTO, and CHRISTOPHE BERNARD, Civil Action No. 09-CV-4471 (TPG) ECF Case Defendants. MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF S COUNSEL S MOTION FOR AN AWARD OF ATTORNEYS FEES AND REIMBURSEMENT OF LITIGATION EXPENSES BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP Gerald H. Silk Lauren A. McMillen 1285 Avenue of the Americas New York, NY Tel: (212) Fax: (212) Attorneys for Plaintiff Andrea Barron and the Settlement Class Dated: November 7, 2012

2 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 2 of 24 TABLE OF CONTENTS TABLE OF AUTHORITIES... iii PRELIMINARY STATEMENT...1 ARGUMENT...4 I. PLAINTIFF S COUNSEL IS ENTITLED TO AN AWARD OF ATTORNEYS FEES FROM THE COMMON FUND...4 II. III. THE COURT SHOULD AWARD A REASONABLE PERCENTAGE OF THE COMMON FUND...5 THE REQUESTED ATTORNEYS FEES ARE REASONABLE UNDER EITHER THE PERCENTAGE-OF-THE-FUND METHOD OR THE LODESTAR METHOD...6 A. The Requested Attorneys Fees Are Reasonable Under the Percentage-ofthe-Fund Method...6 B. The Requested Attorneys Fees Are Reasonable Under the Lodestar Method...7 IV. OTHER FACTORS CONSIDERED BY COURTS IN THE SECOND CIRCUIT CONFIRM THAT THE REQUESTED 30% FEE IS FAIR AND REASONABLE...9 A. The Time and Labor Expended by Plaintiff s Counsel Support the Requested Fee...10 B. The Risks of the Litigation Support the Requested Fee...11 C. The Magnitude and Complexity of the Action Support the Requested Fee...14 D. The Quality of Plaintiff s Counsel s Representation Supports the Requested Fee...15 E. The Requested Fee in Relation to the Settlement...16 F. Public Policy Considerations Support the Requested Fee...16 G. The Approval of Plaintiff and the Reaction of the Class To Date Support the Requested Fee...17 V. PLAINTIFF S COUNSEL S EXPENSES ARE REASONABLE AND WERE NECESSARILY INCURRED TO ACHIEVE THE BENEFIT OBTAINED...17 CONCLUSION...18 ii

3 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 3 of 24 TABLE OF AUTHORITIES CASES Page(s) In re Adelphia Commc ns Corp. Sec. & Derivative Litig., No. 03 MDL 1529 LMM, 2006 WL (S.D.N.Y. Nov. 16, 2006)...8, 15 Anwar v. Fairfield Greenwich Ltd., No. 09-CV-118 (VM), 2012 WL (S.D.N.Y. June 1, 2012)...6, 8 Blum v. Stenson, 465 U.S. 886 (1984)...6 Boeing Co. v. Van Gemert, 444 U.S. 472 (1980)...4 Capsolas v. Pasta Res. Inc., No. 10-cv-5595 (RLE), 2012 WL (S.D.N.Y. Oct. 5, 2012)...8 Central States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, LLC, 504 F.3d 229 (2d Cir. 2007)...6 In re China Sunergy Sec. Litig., No. 07 Civ (DAB), 2011 WL (S.D.N.Y. May 13, 2011)...18 City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974)...11 Clark v. Ecolab Inc., No. 7 Civ (PAC), 2010 WL (S.D.N.Y. May 11, 2010)...7 In re Comverse Tech., Inc. Sec. Litig., No. 06-CV-1825 (NGG), 2010 WL (E.D.N.Y. June 24, 2010)...6, 8, 11, 16 In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-CV-3400 (CM) (PED), 2010 WL (S.D.N.Y. Nov. 8, 2010)...8, 14, 18 Fogarazzo v. Lehman Bros., Inc., No. 03-cv-5194 (SAS), 2011 WL (S.D.N.Y. Feb. 23, 2011)...6, 11 In re Giant Interactive Grp., Inc. Sec. Litig., 279 F.R.D. 151 (S.D.N.Y. 2011)...17 In Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004)...12 Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000)... passim iii

4 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 4 of 24 Hayes v. Harmony Gold Mining Co., No. 08 Civ (BSJ) (MHD), 2011 WL (S.D.N.Y. Dec. 2, 2011)...6 Hicks v. Morgan Stanley, No. 01 Civ (RJH), 2005 WL (S.D.N.Y. Oct. 24, 2005)...7, 17 Johnson v. Brennan, No. 10 Civ (CM), 2011 WL (S.D.N.Y. Sept. 16, 2011)...5, 16 Levinson v. About.com Inc., No. 02 Civ (DAB), 2010 WL (S.D.N.Y. Oct. 7, 2010)...7 Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973)...7 Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1976)...7 Lovaglio v. W&E Hopsitality, Inc., No. 10 CIV 7351 (LLS), 2012 WL (S.D.N.Y. July 6, 2012)...8 Maley v. Del Global Techs. Corp., 186 F. Supp. 2d 358 (S.D.N.Y. 2002)...4, 7, 8, 16 In re Marsh ERISA Litig., 265 F.R.D. 128 (S.D.N.Y. 2010)...7, 14 In re Med. X-Ray Film Antitrust Litig., No. CV , 1998 WL (E.D.N.Y. Aug. 7, 1998)...7 Missouri v. Jenkins, 491 U.S. 274 (1989)...6, 9 In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465 (S.D.N.Y. 1998)...12 In re Sadia S.A. Sec. Litig., No. 08 Civ (SAS), 2011 WL (S.D.N.Y. Dec. 28, 2011)...6 Savoie v. Merchs. Bank, 166 F.3d 456 (2d Cir. 1999)...5 Taft v. Ackermans, No. 02 Civ (PKL), 2007 WL (S.D.N.Y. Jan. 31, 2007)...7 In re Telik, Inc. Sec. Litig., 576 F. Supp. 2d 570 (S.D.N.Y. 2008)...5, 11 iv

5 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 5 of 24 In re Union Carbide Corp. Consumer Prods. Bus. Sec. Litig., 724 F. Supp. 160 (S.D.N.Y. 1989)...9 In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL (CM), 2007 WL (S.D.N.Y. Nov. 7, 2007)... passim Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005)...5, 8 RULES Fed. R. Civ. P. 23(h)...1 Fed. R. App. P. 28(j)...2, 10 OTHER AUTHORITIES See Administrative Office of the United States Courts, 2011 Annual Report of the Director: Judicial Business of the United States Courts (2012)...13 v

6 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 6 of 24 Plaintiff s Counsel, Bernstein Litowitz Berger & Grossmann LLP ( BLB&G or Plaintiff s Counsel ), having achieved a recovery of $6.9 million in cash (the Settlement Amount ) for the benefit of the Settlement Class in this action, respectfully submits this memorandum of law in support of its motion, pursuant to Fed. R. Civ. P. 23(h), for an award of attorneys fees in the amount of 30% of Settlement Fund (i.e., 30% of the Settlement Amount with interest on such amount at the same rate as earned by the Settlement Fund). 1 Plaintiff s Counsel also seeks reimbursement of $56, in litigation expenses that it reasonably and necessarily incurred in prosecuting and resolving the Action. PRELIMINARY STATEMENT The $6.9 million proposed Settlement of the Action (which is approximately 20% of the Settlement Class s likely maximum damages (see Silk Decl. at 5)) represents a very positive outcome for the Settlement Class in light of the dismissal of the Action in its entirety by this Court and the other substantial risks of the litigation. This substantial monetary recovery was achieved through the skill, tenacity and effective advocacy of Plaintiff s Counsel, who litigated this Action on a purely contingent fee basis against highly skilled defense counsel. The Settlement was achieved in the face of numerous hurdles and risks that made the specter of no recovery at all for Plaintiff and the other class members a very real possibility. 1 Plaintiff Andrea Barron is simultaneously submitting herewith the Declaration of Gerald H. Silk in Support of (A) Plaintiff s Motion for Final Approval of Class Action Settlement and Approval of Plan of Allocation and (B) Plaintiff s Counsel s Motion for an Award of Attorneys Fees and Reimbursement of Litigation Expenses (the Silk Declaration or Silk Decl. ). The Court is respectfully referred to the Silk Declaration for a detailed description of, inter alia: the history of the Action, the nature of the claims asserted; the negotiations leading to the Settlement; the value of the Settlement to the Settlement Class, as compared to the risks and uncertainties of continued litigation; and a description of the services provided by Plaintiff s Counsel. Unless otherwise noted, capitalized terms have the meanings set out in the Silk Declaration and in the Stipulation and Agreement of Settlement dated September 12, 2012 (ECF No. 52-1) (the Stipulation ).

7 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 7 of 24 As detailed in the accompanying Silk Declaration, Plaintiff s Counsel vigorously pursued this litigation from its outset by, among other things, (i) conducting a thorough investigation of the claims asserted in the Complaint, including researching UBP s partnership agreements, reviewing public filings and press releases and numerous news stories related to Bernard Madoff, the Ascot Fund and Defendants role in investments with Madoff, and interviewing former employees of Defendants regarding the allegations set forth in the Complaint; (ii) conducting extensive legal analysis of Plaintiff s and the class s claims against Defendants; (iii) drafting the Complaint based on this investigation and analysis; and (iv) preparing Plaintiff s briefing in opposition to Defendants motions to dismiss. See Silk Decl. at Following this Court s decision in March 2010 dismissing the Action in its entirety on the grounds that the claims were preempted by the Securities Litigation Uniform Standards Act ( SLUSA ) and New York State s Martin Act, Plaintiff s Counsel continued to zealously pursue the best possible outcome for Plaintiff and other class members by researching, drafting and arguing the appeal of the Court s Dismissal Order to the United States Court of Appeals for the Second Circuit; persuading the New York Attorney General to file an amicus curiae brief in the appeal in support of Plaintiff s position on the scope of the Martin Act preemption; preparing multiple letters to the Second Circuit under Federal Rule of Appellate Procedure 28(j); and engaging in settlement negotiations over an extended period of time. See Silk Decl. at The Settlement achieved as a result of Plaintiff s Counsel s efforts is a notably favorable result when considered in light of the dismissal of the Action and the other considerable risks that were confronted in this case from the outset and that would have remained as obstacles to establishing liability on remand, including the risk of proving that Defendants had acted with gross negligence. In light of the posture of the case at the time the Settlement was achieved and 2

8 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 8 of 24 the significant risks Plaintiff and the class would have continued to face, Plaintiff s Counsel respectfully submits that the Settlement is a testament to its hard work and the quality of its representation. Given the substantial recovery obtained for the benefit of the Settlement Class, the complexity and amount of work involved, the skill and expertise required, and the significant risks that counsel undertook, Plaintiff s Counsel submits that the requested award of 30% of the Settlement Fund and reimbursement of counsel s expenses in the amount of $56,076.56, is fair and reasonable. Federal courts in this District have frequently awarded comparable or greater fees in similar class actions. Moreover, the requested fee represents a multiplier of approximately 1.78 on the total value of the time that Plaintiff s Counsel has dedicated to the Action, a multiplier that is at the low end of the range awarded in class actions with substantial contingency risks. Plaintiff has reviewed and endorsed the requested fee as fair and reasonable. See Silk Decl. at 58. In addition, pursuant to the Court s Order Preliminarily Approving Proposed Settlement and Providing for Notice dated October 1, 2012 (ECF No. 55) (the Preliminary Approval Order ), copies of the Settlement Notice have been mailed to all 184 Settlement Class Members identified by Defendants and a Summary Notice was published in the international edition of The Wall Street Journal and transmitted over the PR Newswire. See Silk Decl. at 47-48; Affidavit of Jose C. Fraga Regarding (A) Mailing of Notices; (B) Publication of the Summary Notice; and (C) Report on Requests for Exclusion Received to Date, Exhibit 1 to the Silk Decl. ( Fraga Aff. ), at 2-4. The Settlement Notice advised Settlement Class Members that Plaintiff s Counsel would apply to the Court for an award of attorneys fees of 30% of the Settlement Fund and reimbursement of Litigation Expenses in an amount not to exceed $80,000. 3

9 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 9 of 24 See Settlement Notice (included in Exhibit A to the Fraga Aff.) at 3, 55. While the deadline set by the Court for Settlement Class Members to object to the motion for attorneys fees and reimbursement expenses has not yet passed, to date no objection to Plaintiff s Counsel s motion for fees and expenses has been received. See Silk Decl. at For all the reasons set forth below, Plaintiff s Counsel respectfully requests that the Court approve its application for an award of attorneys fees and reimbursement of expenses. ARGUMENT I. PLAINTIFF S COUNSEL IS ENTITLED TO AN AWARD OF ATTORNEYS FEES FROM THE COMMON FUND The Supreme Court has long recognized that a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney s fee from the fund as a whole. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980); see Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir. 2000); Maley v. Del Global Techs. Corp., 186 F. Supp. 2d 358, 369 (S.D.N.Y. 2002) ( class counsel who create a settlement fund for the benefit of a class are entitled to be compensated for their services from that settlement fund ). The purpose of the common fund doctrine is to fairly and adequately compensate class counsel for services rendered and to prevent the unjust enrichment of persons who benefit from a lawsuit without bearing its costs. See Boeing, 444 U.S. at 478; Maley, 186 F. Supp. 2d at 369. Courts recognize that awards of fair attorneys fees from a common fund serve to encourage skilled counsel to represent those who seek redress for damages inflicted on entire 2 The deadline for the submission of objections is November 21, Should any objections be received, Plaintiff s Counsel will address them in reply papers, which will be filed with the Court on December 5,

10 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 10 of 24 classes of persons, and therefore to discourage future alleged misconduct of a similar nature. In re Telik, Inc. Sec. Litig., 576 F. Supp. 2d 570, 585 (S.D.N.Y. 2008); see In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL (CM), 2007 WL , at *2 (S.D.N.Y. Nov. 7, 2007) (same). Where relatively small claims can only be prosecuted through aggregate litigation, and the law relies on prosecution by private attorneys general, attorneys who fill the private attorney general role must be adequately compensated for their efforts.... Courts have recognized that fee awards in [class action cases]... serve the dual purposes of encouraging private attorneys general to seek redress for violations and discouraging future misconduct of a similar nature. Johnson v. Brennan, No. 10 Civ (CM), 2011 WL , at *19-*20 (S.D.N.Y. Sept. 16, 2011). II. THE COURT SHOULD AWARD A REASONABLE PERCENTAGE OF THE COMMON FUND Plaintiff s Counsel respectfully submits that this Court should award a fee based on a percentage of the common fund obtained for the Class. The Second Circuit has expressly approved the percentage method, recognizing that the lodestar method proved vexing and had resulted in an inevitable waste of judicial resources. See Goldberger, 209 F.3d at (holding that either the percentage of fund method or lodestar method may be used to determine appropriate attorneys fees); Savoie v. Merchs. Bank, 166 F.3d 456, 460 (2d Cir. 1999) (stating that the percentage-of-the-fund method has been deemed a solution to certain problems that may arise when the lodestar method is used in common fund cases ). More recently, the Second Circuit has reiterated its approval of the percentage method, stating that it directly aligns the interests of the class and its counsel and provides a powerful incentive for the efficient prosecution and early resolution of litigation, and has noted that the trend in this Circuit is toward the percentage method. Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 121 (2d 5

11 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 11 of 24 Cir. 2005); see also Fogarazzo v. Lehman Bros., Inc., No. 03-cv-5194 (SAS), 2011 WL , at *2 (S.D.N.Y. Feb. 23, 2011); In re Comverse Tech., Inc. Sec. Litig., No. 06-CV-1825 (NGG), 2010 WL , at *2 (E.D.N.Y. June 24, 2010). III. THE REQUESTED ATTORNEYS FEES ARE REASONABLE UNDER EITHER THE PERCENTAGE-OF-THE-FUND METHOD OR THE LODESTAR METHOD A. The Requested Attorneys Fees Are Reasonable Under the Percentage-of-the-Fund Method The Supreme Court has recognized that an appropriate court-awarded fee is intended to approximate what counsel would receive if they were bargaining for the services in the marketplace. See Missouri v. Jenkins, 491 U.S. 274, (1989). If this were a nonrepresentative action, the customary fee arrangement would be contingent, on a percentage basis, and in the range of 30% to 33% of the recovery. See Blum v. Stenson, 465 U.S. 886, 903 (1984) ( In tort suits, an attorney might receive one-third of whatever amount the plaintiff recovers. In those cases, therefore, the fee is directly proportional to the recovery. ) (Brennan, J., concurring). The fee requested here was negotiated with and is endorsed by Plaintiff and, at 30%, is well within the range of percentage fees typically awarded in the Second Circuit in class actions with comparable or larger recoveries. See, e.g., Central States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, LLC, 504 F.3d 229, 249 (2d Cir. 2007) (affirming district court s award of 30% of $42.5 million settlement fund); Anwar v. Fairfield Greenwich Ltd., No. 09-CV-118 (VM), 2012 WL , at *1-*3 (S.D.N.Y. June 1, 2012) (awarding 33% of $7.78 million settlement fund); In re Sadia S.A. Sec. Litig., No. 08 Civ (SAS), 2011 WL , at *3 (S.D.N.Y. Dec. 28, 2011) (awarding 30% of $27 million settlement fund); Hayes v. Harmony Gold Mining Co., No. 08 Civ (BSJ)(MHD), 2011 WL , at *1 (S.D.N.Y. Dec. 2, 2011) (awarding 33.3% of $9 million settlement fund); Fogarazzo,

12 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 12 of 24 WL , at *4 (awarding 33.3% of $6.75 million settlement fund); Levinson v. About.com Inc., No. 02 Civ (DAB), 2010 WL , at *3 (S.D.N.Y. Oct. 7, 2010) (awarding 30% of $5.75 million settlement fund); Clark v. Ecolab Inc., No. 7 Civ (PAC), 2010 WL , at *8-*9 (S.D.N.Y. May 11, 2010) (awarding 33.3% of $6 million settlement fund); In re Marsh ERISA Litig., 265 F.R.D. 128, 149 (S.D.N.Y. 2010) (awarding 33.3% of $35 million settlement fund); Veeco, 2007 WL , at *4 (awarding 30% of $5.5 million settlement fund); Taft v. Ackermans, No. 02 Civ (PKL), 2007 WL , at *10 (S.D.N.Y. Jan. 31, 2007) (awarding 30% of $15.2 million settlement fund); Hicks v. Morgan Stanley, No. 01 Civ (RJH), 2005 WL , at *9-*10 (S.D.N.Y. Oct. 24, 2005) (awarding 30% of $10 million settlement fund); Maley, 186 F. Supp. 2d at 370 (awarding 33.3% of $11.5 million settlement fund); see generally Levinson, 2010 WL , at *3 ( Courts in the Second Circuit routinely award 30% or more as attorneys fees in a class action that creates a common fund. ). B. The Requested Attorneys Fees Are Reasonable Under the Lodestar Method To ensure the reasonableness of a fee awarded under the percentage-of-the-fund method, the Second Circuit encourages district courts to cross-check the proposed award against counsel s lodestar. See Goldberger, 209 F.3d at In cases of this nature, fees representing 3 Under the lodestar method, the court multiplies the number of hours each attorney spent on the case by each attorney s reasonable hourly rate; and second, the court adjusts that lodestar figure (by applying a multiplier) to reflect such factors as the risk and contingent nature of the litigation, the result obtained and the quality of the attorney s work. See, e.g., Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp., 487 F.2d 161, (3d Cir. 1973), subsequently refined in Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp., 540 F.2d 102, (3d Cir. 1976) (en banc). Courts are encouraged to award a multiplier because calculation of the lodestar is simply the beginning of the analysis. In re Med. X-Ray Film Antitrust Litig., No. CV , 1998 WL , at *7 (E.D.N.Y. Aug. 7, 1998) (quoting In re Warner Commc ns Sec. Litig., 618 F. Supp. 735, 747 (S.D.N.Y. 1985), aff d 798 F.2d 35 (2d Cir. 1986)). 7

13 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 13 of 24 multiples above the lodestar are regularly awarded to reflect the contingency fee risk and other relevant factors. See, e.g., In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-CV-3400 (CM) (PED), 2010 WL , at *26 (S.D.N.Y. Nov. 8, 2010) ( Under the lodestar method, a positive multiplier is typically applied to the lodestar in recognition of the risk of the litigation, the complexity of the issues, the contingent nature of the engagement, the skill of the attorneys, and other factors. ); Comverse, 2010 WL , at *5 ( Where counsel has litigated a complex case under a contingency fee arrangement, they are entitled to a fee in excess of the lodestar ). In contingent class action litigation, lodestar multipliers between 2 and 5 are commonly awarded. See Wal-Mart, 396 F.3d at 123 (upholding a multiplier of 3.5 as reasonable on appeal); Capsolas v. Pasta Res. Inc., No. 10-cv-5595 (RLE), 2012 WL , at *9 (S.D.N.Y. Oct. 5, 2012) (noting that Courts regularly award lodestar multipliers from 2 to 6 times lodestar and awarding fee representing a 3.96 multiplier); Lovaglio v. W&E Hopsitality, Inc., No. 10 CIV 7351 (LLS), 2012 WL , at *3 (S.D.N.Y. July 6, 2012) (awarding fee representing 2.13 multiplier which is which is well within the range of reasonableness ); Anwar, 2012 WL , at *3 ( A multiplier of 2.42 is well within the range of lodestar multipliers approved by Courts in the Second Circuit and further demonstrates the reasonableness of the requested fee. ); Comverse, 2010 WL , at *5 (awarding fee representing a 2.78 multiplier); In re Adelphia Commc ns Corp. Sec. & Derivative Litig., No. 03 MDL 1529 LMM, 2006 WL , at *3 (S.D.N.Y. Nov. 16, 2006) (awarding fee representing a 2.89 multiplier); Maley, 186 F. Supp. 2d at 371 (awarding fee equal to a 4.65 multiplier, which was well within the range awarded by courts in this Circuit and courts throughout the country ). 8

14 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 14 of 24 Here, the lodestar cross-check fully supports the requested percentage fee. Plaintiff s Counsel has spent a total of 2,190 hours of attorney and other professional support time prosecuting the Action. See Silk Decl. at 59. Plaintiff s Counsel s lodestar, derived by multiplying the hours spent by each attorney and paraprofessional by their current hourly rates, is approximately $1,162, See id. The requested 30% fee, which amounts to $2,070,000 (without interest), represents about 1.78 times Plaintiff s Counsel s lodestar amount. Thus, the 30% fee requested is well within the range of fees routinely awarded. In sum, Plaintiff s Counsel s requested fee award is well within the range of what courts in this Circuit and throughout the country commonly award in complex class actions such as this one, whether calculated as a percentage of the fund or in relation to Plaintiff s Counsel s lodestar. Moreover, as discussed below, Plaintiff has approved the requested fee and the factors established for the review of attorneys fee awards by the Second Circuit in Goldberger also strongly support a finding that the requested fee is reasonable. IV. OTHER FACTORS CONSIDERED BY COURTS IN THE SECOND CIRCUIT CONFIRM THAT THE REQUESTED 30% FEE IS FAIR AND REASONABLE The Second Circuit has set forth the following criteria that courts should consider when reviewing a request for attorneys fees in a common fund case: (1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of the litigation; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations. Goldberger, 209 F.3d at 50 (internal quotes and citation omitted). Consideration of these factors, 4 The Supreme Court and courts in this Circuit have approved the use of current hourly rates to calculate the base lodestar figure as a means of compensating for the delay in receiving payment, inflationary losses, and the loss of interest. See Missouri v. Jenkins, 491 U.S. at 284; Veeco, 2007 WL , at *9; In re Union Carbide Corp. Consumer Prods. Bus. Sec. Litig., 724 F. Supp. 160, 163 (S.D.N.Y. 1989). 9

15 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 15 of 24 together with the analyses above, demonstrates that the fee requested by Plaintiff s Counsel is reasonable. A. The Time and Labor Expended by Plaintiff s Counsel Support the Requested Fee As noted above, Plaintiff s Counsel has expended more than 2,100 hours prosecuting this Action. Plaintiff s Counsel s efforts included a thorough investigation of the factual and legal issues raised in the Action, which entailed (i) analyzing the terms of the Selectinvest ARV LP partnership agreement; (ii) researching and obtaining as much information as possible about the other UBP Funds and their respective agreements; (iii) reviewing Defendants public filings and press releases and numerous news stories related to Madoff, the Ascot Fund and Defendants role in the investments with Madoff and other public information; (iv) conducting investigative interviews with former employees of Defendants UBP and UBPAM; and (v) undertaking a detailed legal analysis of the potential claims against Defendants and their potential defenses. See Silk Decl. at 17. Plaintiff s Counsel also spent substantial time and effort preparing the Complaint, preparing briefing in response to Defendants motions to dismiss, and preparing Plaintiff s motion to designate interim class counsel and consolidate related cases. Silk Decl. at Following the Court s decision on the motion to dismiss, Plaintiff s Counsel vigorously pursued the appeal to the Second Circuit, which included researching, briefing and arguing the appeal, persuading the New York Attorney General to submit an amicus brief in support of Plaintiff s position on the Martin Act issue, and preparing multiple letters to the Second Circuit under Federal Rule of Appellate Procedure 28(j) citing and explaining recent supplemental authorities in support of her appeal or responding to Defendants letters regarding supplemental authorities. Id. at In addition, Plaintiff s counsel engaged in settlement negotiations with 10

16 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 16 of 24 Defendants over an extended period of time and, following the agreement in principle to settle in February 2012, expended additional months in negotiating the final terms of the Settlement so as to protect the interests of Settlement Class Members and other affected persons. Id. at 37-38, 40. Throughout the litigation, Plaintiff s Counsel staffed the matter efficiently and avoided any unnecessary duplication of effort. The significant amount of time and effort devoted to prosecuting and resolving this case by Plaintiff s Counsel and the efficient and effective management of the litigation confirm that the fee request here is reasonable. B. The Risks of the Litigation Support the Requested Fee The risk of the litigation is often considered the most important Goldberger factor. See Goldberger, 209 F.3d at 54; Telik, 576 F. Supp. 2d at 592 ( the risk of the litigation is a pivotal factor in assessing the appropriate attorneys fees ). The Second Circuit has recognized that the risk associated with a case undertaken on a contingent fee basis is an important factor in determining an appropriate fee award: No one expects a lawyer whose compensation is contingent upon his success to charge, when successful, as little as he would charge a client who in advance had agreed to pay for his services, regardless of success. Nor, particularly in complicated cases producing large recoveries, is it just to make a fee depend solely on the reasonable amount of time expended. City of Detroit v. Grinnell Corp., 495 F.2d 448, 470 (2d Cir. 1974) (citation omitted), abrogated on other grounds by Goldberger, 209 F.3d 43. Little about litigation is risk-free, and class actions confront even more substantial risks than other forms of litigation. Comverse, 2010 WL , at *5; see also Fogarazzo, 2011 WL , at *3 ( The risk of dismissal and, hence, non-recovery, was a very possible outcome... Thus, the litigation risk in this case supports a one-third fee award ). 11

17 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 17 of 24 While Plaintiff s Counsel believes that the claims of Plaintiff had merit, Plaintiff s Counsel recognized that there were a number of substantial risks in the litigation and Plaintiff s ability to continue to pursue the Action and establish liability was far from certain. Indeed, this case presented substantial risks and uncertainties from the time it was filed, which made it far from certain that any recovery, let alone a substantial settlement of $6.9 million in cash (which represents approximately 20% of the likely maximum recoverable damages), would ultimately be obtained. If Defendants were to prevail, the class and therefore Plaintiff s Counsel would receive nothing. As discussed in greater detail in the Silk Declaration and in the memorandum of law in support of the Settlement, the Action posed substantial risks both from the outset and at the time the Settlement was reached. A key risk in this Action, from the beginning, was the possibility of a ruling that that all claims asserted by Plaintiff against Defendants were preempted under either SLUSA or New York s Martin Act. This significant risk materialized when this Court granted Defendants motions to dismiss on both these grounds and, while Plaintiff s Counsel had appealed that ruling and believed that there were meritorious grounds for reversal, there was still a very substantial risk of affirmance on SLUSA preemption grounds by the Second Circuit, which would have terminated the Action in its entirety with prejudice. See Silk Decl. at A decision of the New York State Court of Appeals issued after this Court s ruling on the motions to dismiss (and while the appeal was pending) resolved the Martin Act issue in Plaintiff s favor and Defendants, in a letter to the Second Circuit, had conceded that issue. See Silk Decl. at 28. Nonetheless, the uncertain state of the law at the time Plaintiff s Counsel initiated the Action made this a genuine litigation risk that should be considered in determining the reasonableness of attorneys fees to counsel who were acting on a contingent basis. See, e.g., In Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 467 (S.D.N.Y. 2004) ( [L]itigation risk must be measured as of when the case is filed, rather than with the hindsight benefit of subsequent events ) (quoting Goldberger, 209 F.3d at 55); In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 488 (S.D.N.Y. 1998) (for purposes of assessing the 12

18 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 18 of 24 Plaintiff s Counsel recognized that, even if the Second Circuit reversed the dismissal of the Complaint, and remanded the case to this Court, there were still significant risks that Plaintiff s claims might not survive another round of motions to dismiss or a motion for summary judgment, or that Plaintiff would be unable to establish Defendants liability at trial. Silk Decl. at 32. For example, Plaintiff s Counsel believed that there was a risk that, on another round of motions to dismiss, Defendants would assert that the Court lacked jurisdiction over the foreign defendants. Id. at 33. If Plaintiff failed to establish jurisdiction over these defendants UBP and certain of the Individual Defendants the Action could not have proceeded against them and there would have been no possibility of any recovery from them. Id. Plaintiff s Counsel also faced the significant challenge of proving that Defendants acted with, at a minimum, gross negligence in allowing class members funds to be invested with Madoff. In their motions to dismiss, Defendants had argued that all of Plaintiff s claims must be dismissed unless Plaintiff could establish that Defendants actions constituted fraud, willful misconduct or gross negligence (as opposed to simple negligence), citing an exculpation provision in the limited partnership agreement purportedly governing Selectinvest ARV LP, the fund in which Plaintiff invested. Plaintiff s Counsel recognized that, if the Action were remanded, Defendants would likely renew this argument in another motion to dismiss. Plaintiff s Counsel would also face the substantial burden of having to prove at least gross negligence at trial in order to establish Defendants liability. See Silk Decl. at 34. In the face of these uncertainties regarding the outcome of the case, Plaintiff s Counsel undertook this case on a wholly contingent basis, knowing that the litigation could last for years reasonableness of attorneys fees, risk must be judged as it appeared to counsel at the outset of the case ). 13

19 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 19 of 24 and would require the devotion of a substantial amount of attorney time and a significant expenditure of litigation expenses with no guarantee of compensation. Indeed, the risk of nonpayment in complex cases, such as this one, is very real. There are numerous class actions in which counsel expended thousands of hours and yet received no remuneration whatsoever despite their diligence and expertise. Veeco, 2007 WL , at *6. Plaintiff s Counsel s assumption of this contingency fee risk supports the reasonableness of the requested fee. See FLAG Telecom, 2010 WL , at *27 ( the risk associated with a case undertaken on a contingent fee basis is an important factor in determining an appropriate fee award ); Marsh ERISA, 265 F.R.D. at 148 ( There was significant risk of non-payment in this case, and Plaintiffs' Counsel should be rewarded for having borne and successfully overcome that risk. ). C. The Magnitude and Complexity of the Action Support the Requested Fee The magnitude and complexity of the Action also support the requested fee. As noted above and in the Silk Declaration, the litigation raised a number of complex factual and legal issues that would have required extensive efforts by Plaintiff s Counsel to bring to resolution. To build the case, Plaintiff s Counsel had to conduct a thorough factual and legal investigation and had to conduct extensive legal research and briefing on issues such as SLUSA and Martin Act preemption and standing before the District Court and on appeal. If the Action had not settled, and if Plaintiff had prevailed on her appeal, there would have mostly likely been renewed motions to dismiss, as well as substantial document discovery and numerous depositions. The fact that a number of the Defendants and potentially important witnesses were located outside the United States (UBP itself and several of the Individual Defendants were based in Switzerland), which had already increased the complexity and costs of service of process by necessitating the use of the procedures set forth under the Hague Convention, would also have increased the complexity and costs of the discovery efforts. Expert discovery to address issues such as the 14

20 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 20 of 24 nature of investment managers fiduciary duties to their clients and the standard of care or due diligence expected of such investment managers would also mostly likely have been necessary. The numerous arguments raised in Defendants motions to dismiss are also indicative of the many issues that the Action would present and the vigorous defense that Defendants Counsel could be expected to mount throughout the course of the litigation. Accordingly, the magnitude and complexity of this Action support the conclusion that the requested fee is reasonable and fair. D. The Quality of Plaintiff s Counsel s Representation Supports the Requested Fee The quality of the representation by Plaintiff s Counsel is another important factor that supports the reasonableness of the requested fee. Plaintiff s Counsel respectfully submits that the quality of its efforts in the litigation to date, together with its substantial experience in investor class actions and its commitment to the litigation provided it with the leverage necessary to negotiate the Settlement under extremely difficult circumstances. The case had been dismissed in the entirety and the likelihood of reversal on appeal was statistically very low. See Administrative Office of the United States Courts, 2011 Annual Report of the Director: Judicial Business of the United States Courts (2012), at Table B-5 (reporting a reversal rate in private civil appeals within the Second Circuit of only 8.8%). Courts have repeatedly recognized that the quality of the opposition faced by plaintiffs counsel should also be taken into consideration in assessing the quality of the counsel s performance. See, e.g., Veeco, 2007 WL , at *7 (among factors supporting 30% award of attorneys fees was that defendants were represented by one of the country s largest law firms ); Adelphia, 2006 WL , at *3 ( The fact that the settlements were obtained from defendants represented by formidable opposing counsel from some of the best defense firms in 15

21 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 21 of 24 the country also evidences the high quality of lead counsels work ); Maley, 186 F. Supp. 2d at 373 ( The quality of opposing counsel is also important in evaluating the quality of the services rendered by Plaintiffs Class Counsel. ). Here, Defendants were represented by Wachtell, Lipton, Rosen & Katz, one of the country s most prominent law firms, which skillfully and effectively represented its clients. See Silk Decl. at 61. Notwithstanding this formidable opposition, Plaintiff s Counsel s ability and demonstrated willingness to continue to vigorously prosecute the Action enabled it to achieve a very favorable settlement for the benefit of the Settlement Class. E. The Requested Fee in Relation to the Settlement Courts have interpreted this factor as requiring the review of the fee requested in terms of the percentage it represents of the total recovery. When determining whether a fee request is reasonable in relation to a settlement amount, the court compares the fee application to fees awarded in similar... class-action settlements of comparable value. Comverse, 2010 WL , at *3. As discussed in detail in Part III.A above, the requested 30% fee is comfortably within the range of percentage fees that courts in the Second Circuit and around the country have awarded in comparable cases. Accordingly, the 30% fee requested is reasonable in relation to the size of the Settlement. F. Public Policy Considerations Support the Requested Fee A strong public policy concern exists for rewarding firms for bringing successful class action litigation. Awards of reasonable attorney fees to counsel who bring claims on behalf a class serves to encourage skilled counsel to represent those who seek redress for damages inflicted on entire classes of persons and helps discourage future alleged misconduct of a similar nature. See, e.g., Johnson v. Brennan, 2011 WL , at *20 ( fee awards in [class action cases]... serve the dual purposes of encouraging private attorneys general to seek redress for 16

22 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 22 of 24 violations and discouraging future misconduct of a similar nature ); In re Giant Interactive Grp., Inc. Sec. Litig., 279 F.R.D. 151, 165 (S.D.N.Y. 2011) (there is commendable sentiment in favor of providing lawyers with sufficient incentive to bring common fund cases that serve the public interest so as to attract well-qualified plaintiffs counsel who are able to take a case to trial, and who defendants understand are able and willing to do so. ) (internal quotation marks omitted); Hicks, 2005 WL , at *9 ( To make certain that the public is represented by talented and experienced trial counsel, the remuneration should be both fair and rewarding. ). Accordingly, public policy also favors granting Plaintiff s Counsel s fee and expense application here. G. The Approval of Plaintiff and the Reaction of the Class To Date Support the Requested Fee Plaintiff who individually and through her advisors was substantially involved in the prosecution of the action and negotiation of the Settlement has approved the requested fee. See Silk Decl. at 58. Additionally, the reaction of the Settlement Class to date also supports the requested fee. On October 11, 2012, the Claims Administrator mailed the Settlement Notice to all Identified Settlement Class Members informing them, among other things, that Plaintiff s Counsel intended to apply to the Court for an award of attorneys fees of 30% of the Settlement Fund and up to $80,000 in expenses. See Silk Decl. at 68. While the time to object to the fee and expenses application does not expire until November 21, 2012, to date, not a single objection has been received. Id. Should any objections be received, Plaintiff s Counsel will address them in reply papers. V. PLAINTIFF S COUNSEL S EXPENSES ARE REASONABLE AND WERE NECESSARILY INCURRED TO ACHIEVE THE BENEFIT OBTAINED Plaintiff s Counsel s fee application includes a request for reimbursement of litigation expenses that were reasonably incurred and necessary to the prosecution of this Action. See Silk 17

23 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 23 of 24 Decl. at These expenses are properly recovered by counsel. See In re China Sunergy Sec. Litig., No. 07 Civ (DAB), 2011 WL , at *6 (S.D.N.Y. May 13, 2011) (in a class action, attorneys should be compensated for reasonable out-of-pocket expenses incurred and customarily charged to their clients, as long as they were incidental and necessary to the representation ) (citation omitted); FLAG Telecom, 2010 WL , at *30 ( It is well accepted that counsel who create a common fund are entitled to the reimbursement of expenses that they advanced to a class ). As set forth in detail in the Silk Declaration, Plaintiff s Counsel incurred $56, in litigation expenses in the prosecution of the Action. Silk Decl. at 71. Reimbursement of these expenses is fair and reasonable. The expenses for which Plaintiff s Counsel seeks reimbursement are the types of expenses that are necessarily incurred in litigation and routinely charged to clients billed by the hour. These expenses include, among others, computerized factual and legal research, the costs of service on the foreign defendants, photocopying, long distance telephone and facsimile charges, postage and delivery expenses, and filing fees. Id. at The foregoing expense items are billed separately by Plaintiff s Counsel, and such charges are not duplicated in the firm s hourly billing rates. The Settlement Notice informed Settlement Class Members that Plaintiff s Counsel would apply for reimbursement of litigation expenses in an amount not to exceed $80,000. The actual amount of expenses requested is below the amount listed in the Settlement Notice and, to date, there has been no objection to the request for expenses. CONCLUSION For the foregoing reasons, Plaintiff s Counsel respectfully requests that the Court award attorneys fees of 30% of the Settlement Fund and $56, in reimbursement of the reasonable litigation expenses Plaintiff s Counsel incurred in connection with the prosecution of this Action. 18

24 Case 1:09-cv TPG Document 59 Filed 11/07/12 Page 24 of 24 Dated: November 7, 2012 Respectfully submitted, BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP By: s/ Gerald H. Silk Gerald H. Silk Lauren A. McMillen 1285 Avenue of the Americas New York, NY Telephone: (212) Attorneys for Plaintiff Andrea Barron and the Settlement Class #