UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

Transcription

1 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 1 of 13 PageID: 3678 Case 2:06-cv JLL-MF Document Fed 01123/15 Page 1 of 13 Page(D: 3357 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY RALPH DEMMICK, on behalf of Civ. Act. No (JLL) himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated, V. Plaintiffs, CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10, Defendant. FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER AWARDING ATTORNEYS FEES TO CLASS COUNSEL, REIMBURSING EXPENSES INCURRED BY CLASS COUNSEL AND APPROVING PAYMENT OF SETTLEMENT ADMINISTRATOR S FEES AND EXPENSES

2 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 2 of 13 PageID: 3679 Case 2:06-cv JLL-MP Document Filed 01/23/15 Page 2 of 13 PagelD: 3358 The Court having considered the papers filed in support of Plaintiffs Motion for Order: (1) Awarding Attorneys Fees to Class Counsel; (2) Reimbursing Expenses Incurred by Class Counsel; and (3) Approving Payment of the Settlement Administrator s Fees and Expenses ( Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion ), and having considered any and all filed objections to the Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion, hereby makes the following findings of fact and conclusions of law: FINDINGS OF FACT 1 Pursuant to Fed.R. Civ.P. 23(h)(3), 52(a), and 54(d)(2)(C) the Court makes the following findings of fact: (1) The parties negotiated and agreed upon a common fund settlement in this action ( Settlement ) valued at $64.2 million and comprised of $36,700,000 in cash and $27,500,000 in calling units. (2) The parties agreed on the terms of the Settlement after multiple mediation sessions conducted by the Hon. Layn Phillips, a former Judge of the United States District Court for the Western District of Oklahoma. (3) There was no discussion of attorneys fees during these mediation sessions, and there is no basis to believe that the amount or terms of the Settlement were impacted by considerations related to attorneys fees. 1

3 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 3 of 13 PageID: 3680 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 3 of 13 PagelD: 3359 (4) Verizon Wireless takes no position on the Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion submitted by Class Counsel. (5) The aggregate lodestar of Class Counsel and FCC Counsel in the amount of $4,848,134 is reasonable and justified based on, among other things: (a) the market competitive hourly rates charged by Plaintiffs counsel for the work that was performed; (b) the significant time and effort that was expended by Plaintiffs counsel (more than 8540 hours); and (c) the duration of the case (more than nine years). (6) The total expenses incurred by Plaintiffs counsel in the amount of $352,883 were reasonably and necessarily incurred in connection with the prosecution and resolution of this action. (7) The fees and expenses of the court-appointed Settlement Administrator, Kurtzman Carson Consultants ( KCC ), of up to $2,057,647 were reasonable and necessary in order to disseminate class notice and perform settlement administration services. (8) Class Counsel s request for an award of $19,260,000 in attorneys fees represents 30% of the $64.2 million value of the Settlement. 2

4 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 4 of 13 PageID: 3681 Case 2:06-cv JLL-MF Document Red 01/23/15 Page 4 of 13 PagelD: 3360 (9) Class Counsel s request for an award of $19,260,000 in attorneys fees equates to a multiplier of 3.97 on the aggregate lodestar of Class Counsel and FCC Counsel through January 23, 2015 in the amount of $4,848,134. (10) Therefore, whether analyzed as a percentage-of-the-recovery or on a lodestar/multiplier basis, the attorneys fees requested by Class Counsel in the amount of $19,260,000 are fair and reasonable. (11) The Class Notice that was disseminated to class members and is posted on the website notified class members of the amounts of attorneys fees, litigation expenses and incentive awards that would be sought. (12) The Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion was filed on January 23, 2015 and posted on the website on January 26, 2013, thereby providing Settlement Class Members with a full month until February 27, 2015 in which to file any objection to the Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion. (13) The notice portion of the Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion prominently notifies all Settlement Class Members in CAPITAL LETTERS of their right to oppose or object to the Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion 3

5 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 5 of 13 PageID: 3682 Case 2:06-cv JLL-MF Document Fi ed 01/23/15 Page 5 of 13 PagelD: 3361 in whole or in part, directs Settlement Class Members to Section 16 of the Class Notice posted on the website for instructions on how to object, and notifies Settlement Class Members of the February 27, 2015 deadline to oppose or object to the Attorneys Fees, Litigation Expenses and Settlement Administration Costs Motion. CONCLUSIONS OF LAW Pursuant to Fed.R. Civ.P. 23(h)(3), 52(a) and 54(d)(2)(C), the Court makes the following conclusions of law: (1) Courts must thoroughly analyze an application for attorneys fees in a class action settlement. In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 299 (3d Cir. 2005). (2) The Court must undertake this thorough analysis even where the parties have agreed upon or where there is no objection to the requested attorneys fees. Yong Soon Oh v. AT&T Corp., 225 F.R.D. 142, 146 (D.N.J. 2004); In re Pet Food Prods. Liab. Litig., 629 F.3d 333, 358 (3d Cir. 2010) (quoting from Fed. R. Civ. P. 23(h)(4) advisory committee note ( Whether or not there are formal objections, the court must determine whether a fee award is justified... (3) Tn a federal class action settlement, federal law governs the decision concerning fees and costs. In re Diet Drugs, 582 F.3d 524, 540 (3d Cir. 2009); McGee v. Cont l Tire N Am., Inc., 2009 WL , at *13 (D.N.J. Mar. 4, 2009). 4

6 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 6 of 13 PageID: 3683 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 6 of 13 PagelD: 3362 (4) Under federal class action case law, courts in the Third Circuit assess attorneys fees in class actions in one of two ways: the percentage-of-recovery method or the lodestar-multiplier method. See In re Rite Aid, supra, 396 F.3d at 300. The former applies a certain percentage to the [settlement] fund. The latter multiplies the number of hours class counsel worked on a case by a reasonable hourly billing rate for such services. In re Diet Drugs, supra, 582 F.3d at 540 (internal quotation marks and citations omitted). The ultimate choice of methodology rests within the sound discretion of the Court. In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 821 (3d Cir. 1995). (5) Courts in the Third Circuit typically apply the percentage-of-recovery method of assessing attorneys fees in cases where there is an established common fund. See, e.g., In re Rite Aid, supra, 396 F.3d at 300 ( the percentage-of-recovery method is generally favored in common fund cases because it allows courts to award fees from the fund in a manner that rewards counsel for success and penalizes it for failure. ). See also In re AT&T Corp. Sec. Litig., 455 F.3d 160, 164 (3d Cir. 2006); In re Cendant Corp. PRIDES Litigation, 243 F.3d 722, 732 (3d Cir. 2001); In re Electrical Carbon Products Anti-Trust Litigation, 447 F.Supp.2d 389, 405 (D.N.J. 2006). 5

7 which Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 7 of 13 PageID: 3684 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 7 of 13 PagelD: 3363 (6) The percentage-of-recovery method awards counsel a variable percentage of the amount recovered for the class. In re Gen. Motors, supra, 55 F.3d at 819 n. 38. The Third Circuit has noted with approval percentage-ofrecovery attorneys fees awards which range from as little as 19% of the recovery to as much as 45% of the recovery. Id. at 822 (identifying range between 19% and 45/). Many district courts in this Circuit have chosen to award attorneys fees at the /0 level is the approximate median of the range recognized as acceptable by the Third Circuit. See, e.g., In re Merck & Co., inc. Vytorin ERISA Litig., 2010 WL , at *9 (D.N.J. Feb. 9, 2010) (approving fee of 33 1/3% of settlement); Rowe v. E.I. Dupont de Nemours & co., 2011 WL , at *22 (D.N.J. Aug. 26, 2011) (fmding award of 33.33% to be reasonable in case establishing $8.3 million settlement fund); Milliron v. T-Mobile USA, Inc., 2009 WL , at *8 (D.N.J. Sept. 10, 2009), as amended (Sept. 14, 2009), aff d, 423 F. App x 131 (3d Cir. 2011) (awarding attorneys fees of 33.33% of $13.5 million); McGee, supra, 2009 WL , at * 16 (court approved fee of up to 32 /o of the value of settlement in a case which went from filing to settlement in two years and where the only contested motion was a motion to dismiss). (7) In common-fund cases where the attorneys fees are to be paid as a percentage of the recovery from the same source as the settlement benefits, the courts of this Circuit analyze the attorneys fees request based on the factors set 6

8 where Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 8 of 13 PageID: 3685 Case 2:06-cv JLL-MF Document Filed 01123/15 Page 8 of 13 PagelD: 3364 forth by the Third Circuit in Gunter V. Ridgewood Energy Corp., 223 F.3d 190 (3d Cir. 2000). See Milliron, supra, 2009 WL , at *9 ( In common fund cases of the type presented here attorneys fees and the Class recovery come from the same source and the fees are based on a percentage of the Class settlement the Third Circuit has set forth a multi-factor analysis to help analyze whether or not the percentage award is reasonable. ) (8) The seven Gunter factors are: (1) the size of the fund created and the number of persons benefitted; (2) the presence or absence of substantial objections by members of the class to the settlement terms andjor fees requested by counsel; (3) the skill and efficiency of the attorneys involved; (4) the complexity and duration of the litigation; (5) the risk of nonpayment; (6) the amount of time devoted to the case by plaintiffs counsel; and (7) the awards in similar cases. Gunter, supra, 233 F.3d at 195 n.l. See also, In reat&tc orp., supra, 455 F.3d at 165; In re Cendant, supra, 243 F.3d at 733; Electrical carbon, supra, 447 F.Supp.2d at 405. (9) The Gunter factors are not to be applied in a formulaic way because each case is different and in certain cases, one factor might outweigh the rest. In re AT&T Corp., supra, 455 F.3d at

9 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 9 of 13 PageID: 3686 Case 2:06-cv JLL-MF Document Red 01/23/15 Page 9 of 13 PagelD: 3365 (10) What is important is that the district court evaluate what class counsel actually did and how it benefitted the class. In re AT&T Corp., supra, 455 F.3d at ; In re Ikon Office Solutions, Inc. Securities Litigation, 194 F.R.D. 166, 194 (E.D. Pa. 2000) ( The most significant factor in this case is the quality of representation, as measured by the quality of the result achieved, the difficulties faced, the speed and efficiency of the recovery, the standing, experience, and expertise of the counsel, the skill and professionalism with which counsel prosecuted the case and the performance and quality of opposing counsel. ) (quoting from In re omputron Software, Inc., 6 F.Supp.2d 313, 323 (D.N.J. 1998)). (11) The Third Circuit recommends that courts cross-check the percentageof-recovery calculation with the lodestar-multiplier method to ensure that the percentage-of-recovery calculation is not too great. In re AT&T Corp., supra, 455 F.3d at 164. That said, the lodestar cross-check, while useful, should not displace a district court s primary reliance on the percentage-of-recovery method. Id. Moreover, [tjhe lodestar cross-check calculation need entail neither mathematical precision nor bean-counting. In re Rite Aid, supra, 396 F.3d at 300. Rather, district courts may rely on summaries submitted by attorneys and need not review actual billing records. Id. 8

10 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 10 of 13 PageID: 3687 Case 2:06-cv JLL-MF Document liied 01/23/15 Page 10 of 13 PagelD: 3366 (12) The lodestar method calculates fees by multiplying the hours expended by an appropriate hourly rate. In re Gen. Motors, supra, 55 F.3d at 819, n.37. The hours billed must be reasonable in amount, and the hourly rates of those performing the services must be reasonable in the market and properly account for the quality of the work and the experience of the lawyer. In re Rite Aid, supra, 396 F.3dat3O6n. 14. (13) Class Counsel s lodestar is presumptively reasonable where it arises from a reasonable hourly rate and a reasonable number of hours. Planned Parenthood v. Attorney General of the State of New Jersey, 297 F.3d 253, 265 n.5 (3d Cir. 2002). In assessing the reasonableness of an attorney s hourly rate, courts consider the prevailing market rate in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. Barkouras V. Hecker, 2007 WL , at *3.4 (D.N.J. June 20, 2007) (citing Blum v. Stenson, 465 U.S. 886, and n.h (1984)). (14) Where there has been a class settlement, the lodestar is usually multiplied by a factor to reflect the degree of success, the risk of non-payment the attorneys faced and perhaps the delay in payment that they encountered. Brown v. Esmor Corr. Servs., 2005 WL , at *13 (D.N.J. Aug. 10, 2005); see also In Re Prudential Ins. Co. Am. Sales Practices Litig. Agent Actions, 148 F.3d 283, 340 (3d Cir. 1998) ( Multipliers may reflect the risks of nonrecovery facing counsel, 9

11 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 11 of 13 PageID: 3688 Case 2:06-cv JLL-MF Document RIed 01123/15 Page 11 of 13 PagelD: 3367 may serve as an incentive for counsel to undertake socially beneficial litigation, or may reward counsel for an extraordinary result. ). (15) The Third Circuit has recognized that lodestar multipliers from one to four are frequently awarded in class cases. In re Prudential Ins. Co., supra, 148 F.3d at 341 (citing 3 Herbert Newberg & Albert Conte, Newberg on Class Actions at 14-5 (3d ed. 1992)); see also In re Cendant Corp. Litig., supra, 243 F.3d at (multiplier of 3 used although case was neither legally nor factually complex, there was a minimal amount of motion practice, and the parties submitted a settlement agreement within four months of the filing date); In re Vtorin ERISA Litig., supra, 2010 WL , at *13 (approving lodestar multiplier of 2.78); In re Rite Aid Corp. Sec. Litig., 362 F.Supp.2d 587, 590 (E.D. Pa. 2005) (on remand from court of appeals, awarding 6.96 lodestar multiplier in a nine-figure settlement obtained in a risky case without relying on the fruits of any official investigation ). (16) Under Rule 23(h), in a certified class action counsel for a class action is entitled to reimbursement of expenses that were adequately documented and reasonably and appropriately incurred in the prosecution of the class action. Careccio V. BMWofN. Am. LLC, 2010 WL , at *7 (D.N.J. Apr. 29, 2010). See also Merck Sharp & Dohme Pharm., SRL v. Teva Pharm. USA, Inc., 2010 WL , at *4..7 (D.N.J. Mar. 31, 2010). Plaintiffs bear the evidentiary burden of 10

12 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 12 of 13 PageID: 3689 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 12 of 13 PagelD: 3368 showing that the claimed expenses are reasonable. In re Safety Components, Inc. Sec. Litig., 166 F.Supp.2d 72, 108 (D.N.J. 2001). (17) In determining whether the expenses claimed by counsel are reasonable, the Court must consider whether the expenses were adequately documented and appropriately incurred in the prosecution of the case. Mc Gee, supra, 2009 WL , at *18; Yong Soon Oh, supra, 225 F.R.D. at 154. (18) Courts in this district have found that travel and lodging for court or deposition appearances, reasonable photocopying expenses, telephone and facsimile charges, postal, messenger and express mail service charges, witness and expert fees, computer-assisted research fees, filing fees, deposition and trial transcript fees, and other expenses are incidental to and reasonably incurred in connection with litigation and thus recoverable. Dewey v. Volkswagen ofam., 728 F.Supp.2d 546, (D.N.J. 2010). ORDER Pursuant to Fed.R. Civ.P. 23(h), the Court orders as follows: (I) Attorneys fees in the amount of $19,260,000 are awarded to Class Counsel for their services in connection with the litigation and resolution of the claims asserted in this action. (2) Class Counsel shall be reimbursed for their reasonable litigation expenses occurred in connection with this action in the amount of $352,

13 Case 2:06-cv JLL-MF Document 183 Filed 05/01/15 Page 13 of 13 PageID: 3690 Case 2:06-cv JLL-MP Document Filed 01123/15 Page 13 of 13 PagelD: 3369 (3) Kurtzman Carson Consultants, the court-appointed Settlement Administrator, shall be paid up to $2,057,647 in fees and expenses for class notice and settlement administration services. (4) The $1 9,260,00 in attorneys fees, the $352,883 in litigation expenses, and the up to $2,057,647 in settlement administration costs shall be paid from the Settlement Fund. (5) The $1 9,260,00 in attorneys fees will be reduced to the extent of the incentive awards that are being separately granted to the Class Representatives in the aggregate amount of $30,000, so that the net amount that will be paid to Class Counsel for attorneys fees is $19,230,000. Dated 7 Hon. Jose L. Linares United States District Judge 12