Evans et al v. TIN, Inc.
Filing
709
ORDER AND REASONS granting 683 Motion to award common benefit expenses and fees and the proposed allocation is APPROVED; Additionally, contingency fee contracts for privately retained lawyers will be LIMITED to 20% of any individual claimants recovery. Signed by Judge Lance M Africk. (Reference: All cases)(lag, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CIVIL ACTION
TERRAL EVANS ET AL.
No. 11-2067 C/W
11-2068; 11-2069; 11- 2182; 11-2348;
11- 2351; 11-2417; 11- 2949; 11-2985;
11-2987; 11-3018; 11- 3021; 11-3048;
11-3049; 12-18; 11-3050; 12-2042;
12-2424; 12-2815; 12-2819; 12- 2824;
12-2825; 12-2367
REF: ALL CASES
VERSUS
SECTION I
TIN, INC. ET AL.
ORDER AND REASONS
Before the Court is a motion to award common benefit expenses and fees and to allocate
the common benefit fees.1 This Court has carefully considered the record, the memoranda
submitted to the Court, the evidence presented in connection with an evidentiary hearing held on
July 25, 2013, the special master’s report and recommendation, and the law. For the following
reasons, the motion to award common benefit expenses and fees is GRANTED and the proposed
allocation is APPROVED.
Additionally, contingency fee contracts for privately retained
lawyers will be LIMITED to 20% of any individual claimant’s recovery.
Background
I. Factual Background
This lawsuit arises out of the alleged wrongful discharge of contaminants from TIN,
Inc.’s paper mill and waste treatment facility located in Bogalusa, Louisiana (“the Bogalusa
Paper Mill”) into the Pearl River on or about August 9, 2011. According to the First Amended
1
R. Doc. Nos. 683 and 689.
1
and Restated Master Consolidated Class Action Complaint (“the Complaint”), the Pearl River is
a scenic and navigable river within St. Tammany Parish, Louisiana, Washington Parish,
Louisiana, and the State of Mississippi. The Bogalusa Paper Mill is located approximately 50
nautical miles from the mouth of the Pearl River at Lake Borgne and the Gulf of Mexico.
In their Complaint, plaintiffs alleged, among other things, that the unlawful discharge
killed approximately 7,000,000 fish, mussels, and crustaceans living in the Pearl River and the
system of tributaries, ponds, bayous, and streams connected to the river. Plaintiffs claimed that
the discharge permanently altered the natural balance of the Pearl River from Bogalusa,
Louisiana to the mouth of the river at Lake Borgne and the Gulf of Mexico. Plaintiffs further
claimed that the contaminants generated by the Bogalusa Paper Mill may cause serious injury to
those individuals living along the Pearl River.
Plaintiffs also alleged in the Complaint that TIN, Inc. (“TIN”) owns, operates, and has
control over the Bogalusa Paper Mill and any machinery, equipment, activities, and personnel at
the mill.2 Plaintiffs asserted, among other things, that defendant, Luther Bennett, was the duly
appointed corporate manager and senior officer of the Bogalusa Paper Mill and that one or more
of the officers, directors, and managers of TIN, including but not limited to Bennett, were
involved in the decision-making process that resulted in the alleged unlawful discharge.
Plaintiffs claimed that these officers and directors had power over the operations, production,
management, and supervision of the Bogalusa Paper Mill and that they had the means and
opportunity to take actions which would have prevented the discharge. Plaintiffs claimed that
defendants were motivated solely by their desire to maximize profits and that they acted with
careless disregard for the health and safety of the proposed class members. Plaintiffs further
2
According to the Complaint, TIN’s principal place of business is located in Austin, Texas.
2
claimed that defendants failed to timely warn the proposed class members of the discharge of
toxic and hazardous substances into the Pearl River. TIN has denied and continues to deny the
allegations and all charges of wrongdoing or liability.
Plaintiffs have also alleged that several insurance companies issued various insurance
policies to TIN.
The insurance companies were made defendants directly pursuant to the
Louisiana Direct Action Statute, La. Rev. Stat. Ann, § 22:1269, et seq. The insurance companies
denied coverage for the incident and continue to disclaim any liability for the incident.
II. Procedural Background
The relevant procedural background was accurately set forth by the parties in their joint
motion for final approval of the class settlement. As jointly recalled by the parties, the lead case
in this consolidated proceeding was the first of 33 cases filed in various federal and state courts
beginning less than one week after the discharge. During the course of this litigation, the parties
have completed significant amounts of discovery, including numerous depositions, multiple sets
of written interrogatories, requests for production, and requests for admission, considerable
expert work, and production of several hundred thousand pages of documents.
A trial of a small group of class members’ claims was set to commence on December 10,
2012 and it was expected to last three weeks. In anticipation of these bellwether trials, plaintiffs
submitted initial global expert reports, and both plaintiffs and TIN were in the process of
preparing expert reports for individual plaintiff properties. The parties were poised to take a
number of expert depositions, file a number of motions in limine, and incur significant trialrelated time and expenses on behalf of their respective clients.
Simultaneously with these efforts to prepare for the trial, the parties worked diligently
towards a negotiated resolution of all claims related to the incident. Starting in May 2012, the
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parties commenced mediation under the supervision of a neutral mediator, John W. Perry, Jr.
Mr. Perry was heavily involved in all stages of the settlement negotiations and met with the
parties numerous times both in person and via telephone conferences. Settlement negotiations
were adversarial, conducted at arms-length, and counsel for both sides vigorously represented
their clients’ interests during the negotiations.
On September 29, 2012, the plaintiffs’ steering committee (“PSC”) and TIN executed a
term sheet regarding a proposed settlement framework for resolution of matters related to the
incident and setting forth the essential terms of this settlement. The PSC and TIN’s insurance
carriers reached an agreement to resolve plaintiffs’ claims against the insurance carriers on
October 5, 2012.
III. The Settlement Agreement
The class action settlement resolved all claims related to the incident, except for certain
“later-manifested bodily injury” claims. The amended settlement agreement established the
following three subclasses that collectively compose the settlement class:
The Real Property Owners Subclass consists of all non-Business
Entity real property owners who at any time between August 8,
2011 and December 14, 2012 owned real property in the Class
Area. The “Class Area” includes all privately-owned real property
(1) between (a) 1/2 mile west of the West Pearl River, the Pearl
River Canal or Porters River and (b) 1/2 mile east of the East Pearl
River and (2) within a quarter-mile radius of the waste water
treatment system associated with TIN’s pulp and paper
manufacturing facility in Bogalusa, Louisiana. (See also Ex. H,
Class Area map.) TIN will establish a $4.25 million fund for the
Real Property Owners Subclass.
The Business Entities Subclass consists of all Business Entities—
including all companies, corporations, partnerships, sole
proprietorships, and non-profit organizations or any other
commercial or business entities—that (1) at any time between
August 8, 2011 and December 14, 2012 either owned or leased real
property in the Class Area; or (2) hold a commercial fishing
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license issued by the United States and/or the States of Louisiana
or Mississippi for which a fee has been paid, that derive an income
from catching and selling seafood, and that have suffered
economic loss at any time from August 8, 2011 to December 14,
2012 as a result of the Incident. TIN will establish a $2.75 million
fund for the Business Entities Subclass.
The Other Impacted Persons Subclass consists of all persons or
Business Entities (except for members of the Real Property
Owners Subclass or Business Entities Subclass, none of whom
may be a member of the Other Impacted Persons Subclass) who
(1) resided within the Class Area between August 8, 2011 and
December 14, 2012 but who did not own real property within the
Class Area during that period; (2) are named as plaintiffs in the
Litigation or any other Related Action; (3) submitted a
questionnaire in the Litigation or any other Related Action; or (4)
otherwise suffered injury, loss, or damage as a result of the
Incident, including recreational users of the Pearl River. TIN will
establish a $1.5 million fund for the Other Impacted Persons
Subclass.
In consideration of the settlement and class release of all claims against the released
parties related to the incident, TIN established the three settlement funds outlined above as well
as a $500,000 “other losses” fund to address certain damages potentially applicable to members
of all three subclasses. The parties agreed that if the amount in any of the four settlement funds
were to exceed the total amount of approved claims submitted for that particular subclass, then
any monies remaining would be distributed to the other settlement funds to address approved
claims submitted by other subclasses. In the event there is money remaining in any of the
settlement funds after all approved claims are paid, the parties agreed it will be donated to one or
more charities or other public interest entities related to the Pearl River ecosystem.
In addition, TIN has established and partially funded a $4.5 million settlement
administration fund to cover expenses associated with administering the settlement, including
the cost of class notice, the notice agent, the settlement administrator, the special master, the lien
resolution administrator, the escrow agent, and accountants supporting the special master.
5
Within 30 days of the effective date of the settlement, TIN and the insurance carriers agreed to
satisfy their remaining funding obligations with respect to the settlement administration fund.
The parties also agreed that if an award for attorney’s fees and costs is approved by the Court
pursuant to Federal Rule of Civil Procedure 23(h), the settlement administration fund will be the
sole source for payment of any such Court approved fees and costs incurred in prosecuting
actions related to the incident. Accordingly, class members will not be responsible for paying
Court approved attorney’s fees or costs from their recovery of settlement benefits.
Consistent with the amended settlement agreement, class members seeking compensation
from the settlement funds have submitted proof of claim forms substantiating their damage
claims.
For certain class members, such as individuals and business entities owning real
property within the class area and residents of the class area, the amended settlement agreement
provides that the special master will establish a “base compensation amount” following review
of all proof of claim forms submitted. The amended settlement agreement then provides a
framework for valuing the claims by increasing the base compensation amount based on the
nature of the property.
For other class members, such as those alleging damage to a business entity on the Pearl
River, impaired use of the Pearl River (such as recreational fishermen) or bodily injury, the
special master will value claims based on the evidence required by the amended settlement
agreement and provided with the proof of claim forms. For instance, the amended settlement
agreement provides that any member of the business entities subclass alleging economic loss due
to the incident must submit evidence of the class member’s profits in a post-incident period (any
two or more consecutive weeks in the two months following the incident) and earnings from the
same period in the prior year.
6
IV. Notice, Fairness Hearing, and Claims Administration
On December 27, 2012, this Court granted preliminary approval of the proposed
settlement between the parties, conditionally certified the settlement class, ordered notice to
potential class members, and provided potential class members with an opportunity either to
exclude themselves from the class or to object to the proposed settlement. On February 7, 2013,
this Court entered an amended order, affirming its earlier order but issuing revised dates for
dissemination of notice of the proposed settlement. The Court also provisionally approved the
procedure for giving notice and the forms of notice, and set a final fairness hearing to take place
on July 10, 2013.
Since this Court’s preliminary approval of the settlement, the Court-appointed notice agent
has provided direct notice to all known putative class members and published the class
settlement notice-short format (“Short Notice”). The notice agent provided the class settlement
notice-long format (“Long Notice”) to the PSC and other plaintiffs’ counsel for distribution to
their respective clients and mailed it to 1,628 additional putative class members jointly identified
by the parties. The notice agent also mailed 1,604 copies of a summary notice to potential class
members residing in areas where tax assessor records evidencing land ownership were
unavailable. The Short Notice was published in nine local newspapers between February 20 and
March 8, 2012 and in three publications related to recreational fishing. Finally, the notice agent
established a website and toll-free number to answer questions about the settlement and the
process for claiming settlement funds.
Class members were required to submit a proof of claim form to the settlement
administrator, including evidence substantiating their claim, by May 29, 2013. A total of 2,073
putative class members submitted proof of claim forms as follows:
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528 putative class members filed proof of claim forms identifying
themselves as members of the real property owners subclass;
59 putative class members filed proof of claim forms identifying
themselves as members of the business entities subclass; and
1,356 putative class members filed proof of claim forms
identifying themselves as members of the other impacted persons
subclass.
Of the 2,073 proof of claim forms filed, 130 forms did not select a subclass.
Class members had the opportunity to exclude themselves from the settlement (i.e., “opt
out”) by mailing written requests for exclusion. A class member who opted out would not have
received any benefits from the settlement, but could have sued or continued to sue TIN and the
other released parties in the future. Class members also had the chance to object and indicate a
desire to express their opinions regarding the settlement or amended settlement agreement at the
fairness hearing. No class members opted out of the settlement. Only five class members
objected to the settlement, and each of those objections has subsequently been withdrawn. No
class members appeared at the fairness hearing for the purpose of objecting to the settlement.
V. Motion for Attorney’s Fees and Expenses
On July 10, 2013, the Court approved the class action settlement as fair, adequate, and
reasonable. Common benefit counsel now seek an award of common benefit fees in the amount
of $3,495,000, which represents 25.89% of the $13,500,000 settlement. The PSC and associated
common benefit counsel have jointly proposed an allocation of the fees. Common benefit
counsel also seek a deduction in the amount of $805,000 from the settlement administration fund
for reimbursement of common benefit expenses and settlement administration costs.
On July 25, 2013, this Court held a hearing on the motion for attorney’s fees and
expenses. The parties submitted declarations attesting to the nature of the work they performed
along with records of their time and expenses. The time and expense records were independently
8
reviewed by Philip A. Garrett, CPA, who was appointed by the Court to provide an accounting
of common benefit expenses and fees. Mr. Garrett was questioned during the hearing regarding
the accuracy of the timesheets and expense records. All common benefit counsel were provided
an opportunity to object to the accuracy and/or methodology of the proposed fee award.
Although two common benefit attorneys initially objected to the proposed allocation, they were
able to resolve their objections during the hearing. The Court took the motion under submission
at the conclusion of the hearing.
Standard of Law
The Court must independently analyze the reasonableness of the requested amount of
attorney’s fees even though they have been determined based upon an agreed framework
proposed in the settlement agreement. See Strong v. BellSouth Telecomm., Inc., 137 F.3d 844,
849-50 (5th Cir. 1998); see also Fed. R. Civ. P. 23(e). “The court must scrutinize the agreed-to
fees under the standards set forth in Johnson v. Georgia Highway Express, 488 F.2d 714 (5th
Cir. 1974), and not merely ‘ratify a pre-arranged compact.’ ” Id. (quoting Piambino, 610 F.2d
1306, 1328 (5th Cir. 1980)). The twelve Johnson factors are: (1) the time and labor required; (2)
the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service
properly; (4) the preclusion of other employment by the attorney due to the acceptance of the
case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations
imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9)
the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11)
the nature and length of the professional relationship with the client; and (12) awards in similar
cases. See Johnson, 488 F.2d at 717-19.
9
“In common fund cases, courts typically use one of two methods for calculating
attorneys’ fees: (1) the percentage method, in which the court awards fees as a reasonable
percentage of the common fund; or (2) the lodestar method, in which the court computes fees by
multiplying the number of hours reasonably expended on the litigation by a reasonable hourly
rate and, in its discretion, applying an upward or downward multiplier.” Union Asset Mgmt.
Holding A.G. v. Dell, Inc., 669 F.3d 632, 643-44 (5th Cir. 2012). The Fifth Circuit has endorsed
both approaches and it has afforded “district courts the flexibility to choose between the
percentage and lodestar methods in common fund cases, with their analyses under either
approach informed by the Johnson considerations.” Id.
The Court finds that the percentage method is the preferred method for ensuring the
reasonableness of the requested fee in this case for the reasons that have been widely recognized
by courts in other common fund cases. See e.g., Turner v. Murphy Oil USA, Inc., 472 F. Supp.
2d 830, 859-61 (E.D. La. 2007) (Fallon, J.) (citing cases). The Fifth Circuit has recognized that
“district courts in this Circuit regularly use the percentage method blended with a Johnson
reasonableness check, and for some it is the ‘preferred method.’” Union Asset, 669 F.3d at 643.
The Court will also conduct a rough lodestar cross check as is the customary practice to ensure
that the requested amount of attorney’s fees is reasonable. See Turner, 472 F. Supp. 2d. at 861.
“The lodestar analysis is not undertaken to calculate a specific fee, but only to provide a rough
cross check on the reasonableness of the fee arrived at by the percentage method.” Id.
Discussion
I. Attorney’s Fees
A. Common Benefit Fees
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As previously stated, the PSC and associated common benefit counsel seek an award of
common benefit fees in the amount of $3,495,000,3 which represents 25.89% of the $13,500,000
settlement.4 According to the Manual for Complex Litigation, “Attorney fees awarded under the
percentage method are often between 25% and 30% of the fund,” with a fee of 25%
“represent[ing] a typical benchmark.” Federal Judicial Center, Manual for Complex Litig. §
14.121 (4th ed. 2007). Courts have generally accepted 25% as a “typical benchmark,” but refine
the analysis using data sets showing the average percentage fee award for the size of the client
recovery. The data sets in the empirical study conducted by Professors Eisenberg and Miller are
commonly used by district courts in this circuit for that purpose. See Theodore Eisenberg &
Geoffrey Miller, Attorney Fees in Class Action Settlements: An Empirical Study, 1 J. EMPIRICAL
LEGAL STUDIES 27 (2004); Theodore Eisenberg & Geoffrey Miller, Attorney Fees in Class
Action Settlements: 1993-2008, 7 J. EMPIRICAL LEGAL STUDIES 248 (2010); see also Brian T.
Fitzpatrick, An Empirical Study of Class Action Settlements and Their Fee Awards, 7 J.
EMPIRICAL LEGAL STUDIES 811 (2010).
3
The amount of attorney’s fees represents the difference between the $4,500,000 defendants
agreed to contribute towards the “settlement administration fund” and the projected expenses of
$1,005,000. Although common benefit counsel have calculated their fees, in part, based on a
structure involving a 100% “enhancement” on costs, they acknowledge that the “enhancement”
is properly considered part of the attorney’s fees rather than costs. R. Doc. No. 689 (citing In re
Katrina Canal Breaches Litig., 628 F.3d 185, 196-97 (5th Cir. 2010) (“We agree with the
Appellants that any ‘enhancement’ of costs is the functional equivalent of a fee.”).
4
The Court agrees that the fee should be determined based on the total value of the $13,500,000
settlement even though the settlement agreement established a separate $4.5 million fund for
payment of attorney’s fees and expenses. See Manual for Complex Litig. § 21.7. To the extent
that the amount of money ultimately distributed through the claims administration process is
unknown, the Court’s rough lodestar cross check will ensure that the fee is reasonable. Cf. id. at
§ 21.71; In re Heartland Payment Sys., Inc. Customer Data Sec. Breach Litig., 851 F. Supp. 2d
1040, 1073-80 (S.D. Tex. Mar. 20, 2012) (Rosenthal, J.).
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According to the Eisenberg and Miller study, the mean percentage fee based on published
opinion data for client recoveries between $9.7 and $15 million is 22.7%, with a standard
deviation of 8.4%. The mean percentage fee based on class action reports data in non-securities
cases for the same recovery range is 27.3%, with a standard deviation of 5.2%. The average of
the mean percentage fees is 25% with an average standard deviation of 6.8%. The results of the
Eisenberg and Miller study support a fee of 25% of the $13.5 million settlement as an
appropriate benchmark in this non-securities case. See In re OCA, Inc. Sec. & Derivative Litig.,
No. 05-2165, 2009 WL 512081, at *20 (E.D. La. Mar. 2, 2009) (Vance, J.) (using the average of
the mean fee percentages of the two data sets as a benchmark).
The Eisenberg and Miller study suggests that requests within one standard deviation of
the benchmark percentage “should be viewed as generally reasonable and approved by the court
unless reasons are shown to question the fee.” Eisenberg & Miller, supra, at 74. The request for
common benefit fees in this case falls well within one standard deviation of the mean fee
percentage identified in the data sets for client recoveries in the $9.7 to $15 million range. The
Court will, nevertheless, proceed to consider whether this benchmark should be adjusted
upwards or downwards based on an analysis of the Johnson factors.
1. The Johnson Factors
a. Time and Labor Required; Time limitations imposed by the client
or the circumstances; Preclusion of other employment by the attorney
due to the acceptance of the case
The PSC and associated common benefit counsel were required to expend a significant
amount of time and labor in order to complete a wide variety of tasks in a relatively short span of
time. This Court imposed rigorous time limitations on the parties in order to ensure an expedited
resolution of this matter. In less than two years, the PSC and associated common benefit counsel
were required to file numerous pleadings and motions, present arguments on important case
12
management issues, review hundreds of thousands of documents produced by defendants, retain
liability, causation, and damages experts, prepare for ninety depositions, attend numerous status
conferences with the Court, prepare witnesses and exhibits for bellwether trials, and negotiate
settlements with both TIN and its various insurance carriers. The attorneys made this possible
by, among other things, coordinating rolling document productions for corporate depositions and
custodial documents for fact witness depositions, and by conducting up to three depositions
simultaneously per day (“triple tracking”).
The PSC and associated common benefit counsel expended more than 12,630 attorney
hours performing common benefit functions over the course of approximately two years. The
Court has independent knowledge of the vast amount of common benefit work performed and
the significant resources invested by the PSC and associated common benefit counsel. The total
hours expended are neither untoward nor surprising in light of the expedited and demanding
nature of this proceeding. The extensive time and labor requirements, strict time limitations, and
preclusion of other employment support the requested 25.89% fee as reasonable in light of the
25% benchmark.
b. Novelty and difficulty of the question; The “undesirability” of the
case
The claims asserted in this case raised a number of novel and difficult questions of
federal and state law. Among other things, this case presented novel and difficult questions
involving conflicts of laws, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act, the Oil
Pollution Act, the general maritime law, and a wide variety of tort laws under Texas, Louisiana,
and Mississippi law. The claims raised challenging issues relating to recovery of business losses,
punitive damages, and injunctive relief under state and federal law. Additionally, this litigation
13
required the PSC to advance the costs of discovery, fund the sampling of the Pearl River, retain
the services of various experts to support plaintiffs’ liability and damages claims, prepare for
bellwether trials, and secure mediation services necessary to achieve a class settlement. Counsel
for plaintiffs have expended and/or reserved a total of $805,000 to satisfy the common benefit
and administration costs, which expenses remain unreimbursed. According to liaison counsel,
the case proved to be a high-risk case because the States of Louisiana and Mississippi owned a
substantial portion of the affected property and the sampling of the Pearl River revealed levels of
contamination that the experts conceded would present no significant ongoing health threat to
individuals.
Additionally, the Court notes that TIN and the insurance carriers vigorously
defended against these claims and they have denied and continue to deny each and every
allegation as well as all charges of wrongdoing or liability. Accordingly, the Court finds that
these factors support the requested 25.89% fee as reasonable in light of the 25% benchmark.
c. Skill requisite to perform the legal service; Experience, reputation,
and ability of the attorneys
This Court recognizes the expertise and experience that the members of the PSC and
associated common benefit counsel employed in the prosecution of this class action lawsuit.
Common benefit counsel have filed declarations outlining their experience, reputation, and
abilities and the significant responsibilities they undertook in connection with this proceeding.
As discussed in greater detail below in connection with the allocation of attorney’s fees, each of
the common benefit lawyers contributed significantly to the resolution of this matter. The Court
readily accepts the fact that their diligence and high level of skill made possible a fair,
reasonable, and adequate settlement within the time constraints imposed by the Court. The Court
finds that their skill, experience, reputation, and demonstrated ability support the requested
25.89% fee as reasonable in light of the 25% benchmark.
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d. Customary fee; Whether the fee is fixed or contingent; Awards in
similar cases
The customary fee and fixed versus contingent factors “primarily deal with the
expectation of plaintiffs’ attorneys at the outset of the case when measuring the risks involved
and deciding whether to accept the case.” In re Vioxx Prods. Liab. Litig., 760 F. Supp. 2d 640,
657 (E.D. La. 2010) (Fallon, J.) (citing Murphy Oil, 472 F. Supp. 2d at 866 and Johnson, 488
F.2d at 718). “In effect, these factors seek to reward the attorney for accepting the risk and
achieving successful results.” Id. The Manual for Complex Litigation and the Eisenberg and
Miller study suggest that a 25% fee award would be well within the range of a customary fee
based on a client recovery of $13,500,000. In light of this Court’s finding that the settlement is
the product of hard fought negotiations that resulted in a fair, reasonable, and adequate resolution
of the claims, the 25% benchmark would appear to be an appropriate indication of a reasonable
fee. The Court notes, however, that when they accepted this case, the common benefit lawyers
accepted a certain degree of risk based on the possibility that the punitive damage claims might
not succeed, the experts would find no significant ongoing health threat to individuals, and the
fact that the States of Louisiana and Mississippi owned a substantial portion of the affected
property. The risk accepted by the PSC and associated common benefit counsel supports the
modest .89% increase in the 25% benchmark.
e. The amount involved and the results obtained
The diligence of the common benefit lawyers resulted in a $13,500,000 settlement which
this Court has found to be fair, adequate, and reasonable.
The settlement will confer a
substantial benefit upon the plaintiffs in light of the fact that the common benefit lawyers secured
$9,000,000 for the direct benefit of the claimants. The settlement also achieved an efficient
resolution of the matter without the need for expensive bellwether trials and additional delay.
15
The fact that there were no opt outs or objections to the class action settlement supports a finding
that the settlement achieved a favorable result for plaintiffs. The Court finds that the amount
involved and the results obtained support the requested 25.89% fee as reasonable in light of the
25% benchmark.
f. Nature and length of professional relationship with the client
The nature and length of the professional relationship between class counsel and the class
members does not support an adjustment upward or downward from the benchmark percentage.
No members of the PSC or any common benefit counsel have submitted any evidence regarding
the nature and/or length of their relationships with the class members. This Court is not aware of
any facts suggesting that the nature and/or length of class counsel’s relationship with the class
would support any adjustment to the benchmark percentage.
2. Summary of the Johnson Factors
An analysis of the Johnson factors confirms that the requested award of 25.89% of the
common fund is well within the range of reasonableness for the admirable work performed by
the common benefit attorneys in this case. The percentage fee is within one standard deviation
of the benchmark percentage fee set forth in the Eisenberg and Miller study and the .89%
increase in the benchmark is supported by almost all of the Johnson factors. Accordingly, the
Court finds that the percentage fee method as informed by the Johnson factors indicates that the
requested fee is reasonable.
3. Lodestar Cross Check
The Court will now conduct a rough lodestar cross check to ensure that the requested
amount of attorney’s fees is reasonable. As explained above, “The lodestar analysis is not
undertaken to calculate a specific fee, but only to provide a rough cross check on the
16
reasonableness of the fee arrived at by the percentage method.” See Murphy Oil, 472 F. Supp.
2d at 859-61.
The lodestar cross-check calculation need entail neither
mathematical precision nor bean counting. For example, a court
performing a lodestar cross-check need not scrutinize each time
entry; reliance on representations by class counsel as to total hours
may be sufficient . . . . Furthermore, the lodestar cross-check can
be simplified by use of a blended hourly rate. . . .
Id. at 867 (citing Vaughn R. Walker & Ben Horwich, The Ethical Imperative of a Lodestar
Cross-Check: Judicial Misgivings About “Reasonable Percentage” Fees in Common Fund
Cases, 18 GEO. J. LEGAL ETHICS 1453, 1463-64 (2005) and In re Rite Aid Corp. Sec. Litig., 396
F.3d 294, 306 (3d Cir.2005)); see also In re Educ. Testing Serv. Praxis Principles of Learning
and Teaching, Grades 7-12 Litig., 447 F. Supp. 2d 612, 632 (E.D. La. 2006).
Pursuant to this Court’s pretrial order, time summaries were submitted by counsel on a
monthly basis and independently reviewed and scrutinized by Mr. Garrett throughout the course
of the litigation. The PSC and associated common benefit counsel submitted a total of 15,144.66
hours of which 12,630.29 were ultimately approved by Mr. Garrett. As explained above, the
Court finds that the amount of hours approved were reasonably expended in prosecuting these
claims. After dividing the requested award for common benefit fees of $3,495,000 by the
12,630.29 accepted attorney hours, the blended hourly rate for the common benefit lawyers is
$276.72.
At least one section of this Court has recently found that ranges of $300 to $400 per hour
for PSC members, $100 to $200 per hour for associates, and $50 to $80 for paralegal services
“reasonably reflect the prevailing rates in this jurisdiction.” Murphy Oil, 472 F. Supp. 2d at 86869. Another section of this Court has utilized a blended rate of $250 based on a prevailing
market rate of $350 per hour for partners, $150 per hour for associates, and $75 per hour for
17
paralegals. In re ETS, 447 F. Supp. 2d at 633. In light of this Court’s previous discussion of the
Johnson factors, the Court finds that the blended hourly rate of $276.72 represents a reasonable
hourly fee for this jurisdiction when considered as part of the rough lodestar cross check in this
particular case.
4. Conclusion
The common benefit lawyers seek an award of common benefit fees in the amount of
$3,495,000, which represents 25.89% of the $13,500,000 settlement. The requested percentage
fee is well within one standard deviation of the benchmark percentage fee identified in the
Eisenberg and Miller study and it is supported by almost all of the Johnson factors. The hourly
rate is also reasonable based on a rough lodestar cross check. Accordingly, the Court finds that
the requested fee should be approved.
B. Contingency Fee Contracts of Privately Retained Attorneys
The Court must now consider the extent to which privately retained attorneys should be
permitted to recover additional sums directly from the recovery of individual plaintiffs. It has
been suggested that privately retained attorneys hired to navigate the claims administration
process stand to recover up to 40% of the $9,000,000 set aside for the claimants through typical
contingency fee contracts. The concern is that such fees would amount to 26.66%5 of the
$13,500,000 settlement fund being paid to privately retained attorneys in addition to the 25.89%
award to common benefit lawyers. For the reasons that follow, this Court is not prepared to
accept the possibility that 52.55% of the overall settlement will be paid to attorneys.
5
If privately retained attorneys recovered 40% of the $9,000,000 dedicated to the recovery of the
plaintiffs, the $3,600,000 recovered by the privately retained attorneys would represent 26.66%
of the $13,500,000 settlement.
18
The concern regarding privately retained attorney’s fees was initially raised by counsel
and it was discussed at length with all parties during status conferences held prior to the fairness
hearing. At the recommendation of all counsel, the Court expanded the duties of the special
master, Donald C. Massey, beyond his role in the claims administration process for the limited
purpose of analyzing whether the Court should limit or “cap” privately retained attorney’s fees.
The special master issued a report and recommendation in which he opined that this
Court has the discretion to consider limiting private contingency fee contracts in connection with
its assessment of the fairness of the class settlement. He found support for this conclusion in
several recent Eastern District of Louisiana decisions in which limits were placed on private
contingency fee contracts in the context of class action settlements and multi-district litigation.
The special master undertook an analysis of the Johnson factors in relation to the work
performed by privately retained attorneys in this particular case. The special master noted that
he did not have the benefit of knowing the precise value of the final award of common benefit
fees and expenses. He also could not predict with any certainty the number of unrepresented
individuals or the actual terms of private attorney contracts. However, the special master was
able to suggest (but stopped short of recommending) that this Court may choose to reasonably
limit private contingency fee agreements to a figure between 20% to 24% of an individual
claimant’s recovery.6 The special master was careful to recommend that any attorneys subject to
the limitation should have an opportunity to seek a fee review in the event of extraordinary
circumstances.
This Court ensured that all privately retained attorneys received a copy of the special
master’s report and recommendation and it offered them an opportunity to respond prior to the
6
The special master prepared a number of charts illustrating a range of possible costs and fees in
order to demonstrate the impact of a decision to limit privately retained attorney’s fees.
19
fairness hearing. The Court received only one objection, in which a privately retained attorney
stated that he represents 366 plaintiffs who were required to complete extensive surveys and
claims forms and provide photocopies of identification, licensing, and medical documents.
Counsel argued that “virtually all of the plaintiffs had significant difficulty in reading and
understanding” the claim forms, but that “the most difficult problem was a significant number of
claimants continually moved and changed their phone numbers which required additional time
and effort throughout the entire process, particularly with completion of the first survey forms.”
Counsel argued that “given the limited recovery of each of the plaintiffs, and the expense
incurred by this firm in staff, cost, expenses and independent contractor time, 24% seems
inordinately low.” Following the fairness hearing, however, counsel advised the Court that he did
not intend to pursue his objections to the special master’s report and recommendation.7
This Court has reviewed the special master’s report and recommendation de novo and it
agrees with the special master’s analysis regarding the Court’s authority to limit the fees of
privately retained attorneys. The Court is well aware of its obligation to protect the interests of
the class in its role as a fiduciary and to ensure the reasonableness of attorney’s fees. Indeed, the
Fifth Circuit has rejected class settlements approved “without any assurance that attorneys’ costs
7
The Court notes that counsel made little attempt to dispute the special master’s report and
recommendation based on an analysis of the Johnson factors. Although he stated the number of
hours various members of his staff expended on the matter, counsel failed to explain the
significance of the time expenditures or provide any estimate of the value of his clients’
recovery. The fact that the “most difficult problem” was keeping track of addresses and
telephone numbers actually suggests that the work was insubstantial relative to the common
benefit work performed in this case. As explained below, however, to the extent that a proper
analysis of the Johnson factors would reveal extraordinary circumstances that would justify a
departure from the fee limitations, counsel will be permitted to raise such concerns.
20
and administrative costs will not cannibalize the entire . . . settlement.” In re Katrina Canal
Breaches Litig., 628 F.3d 185, 195-96 (5th Cir. 2010).8
This Court also agrees with Judge Fallon’s discussion of the Court’s authority to limit
privately retained attorney’s fees in In re Vioxx Products Liability Litigation, 650 F. Supp. 2d
549 (E.D. La. 2009), which was also relied upon to limit privately retained attorney’s fees in In
re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, MDL
No. 2179, R. Doc. No. 6684 (E.D. La. June 15, 2012) (Barbier, J.); see also In re FEMA Trailer
Formaldehyde Prod. Liab. Litig., MDL No. 1873, R. Doc. No. 25885 (E.D. La. May 31, 2012)
(Engelhardt, J.) (distributing an award among common benefit attorneys and privately retained
attorneys); In Re Bayou Sorrel Class Action, No. 04-1101, 2006 WL 3230771 (W.D. La. Oct. 31,
2006) (Haik, J.) (same).
In Vioxx, the Court’s early decision to limit all attorney’s fees to 32% of the overall client
recovery resulted in a “taffy pull” between the common benefit lawyers and the privately
retained attorneys when an award of common benefit fees was sought. In re Vioxx Products
Liability Litig., 760 F. Supp. 2d 640, 653 (E.D. La. 2010) (Fallon, J.). After its extensive
discussion of the court’s authority to limit the fees of privately retained attorneys, the Court
resolved the “taffy pull” through an analysis of the Johnson factors and “the undeniable fact . . .
that the great bulk of the work as well as the expense was borne by the attorneys who performed
common benefit work.” The Court ultimately decided that 6.5% of the 4.85 billion dollar
8
The parties in this case carefully crafted a settlement that fairly and reasonably provided for a
dedicated settlement administration fund to cover the costs of administering the settlement and
paying for common benefit fees and expenses. This Court noted during the fairness hearing that
it had the ability to ensure the fairness of the settlement through its ongoing assessment of
attorney’s fees as noted in the special master’s report and recommendation.
21
recovery should be awarded to the common benefit lawyers, leaving the remaining 25.5% to
privately retained lawyers.
The basic rationale underlying Judge Fallon’s decision regarding attorney’s fees in Vioxx
is also applicable to the facts of this case. Having already determined that the 25.89% common
benefit fee award proposed by the common benefit attorneys is reasonable, the Court must now
decide the extent to which privately retained lawyers may recover additional sums directly from
the recovery of individual plaintiffs. This process generally resembles the Court’s resolution of
the “taffy pull” in Vioxx between the common benefit lawyers and the privately retained lawyers.
Because the Court’s analysis is not necessarily constrained by a defined upper limit on the
percentage for all attorney’s fees (which was 32% in Vioxx), the Court will determine a fair and
reasonable fee for privately retained lawyers based on the Johnson factors and the overall value
of the $13,500,000 settlement. The goal is to ensure that the total amount of attorney’s fees
obtained in this case is reasonable in light of the Johnson factors and that it satisfies the Fifth
Circuit’s requirements for approving class action settlements.
1. The Johnson Factors
The special master has undertaken a well-reasoned analysis of the Johnson factors as they
relate to the work performed in this case by privately retained attorneys. In reviewing the special
master’s report and recommendation de novo, this Court agrees with the special master’s
consideration of the Johnson factors and adopts it in large part as the Court’s own findings as
follows.
a. Time and Labor Required
The special master concluded, and this Court agrees, that the amount of time and effort
required to properly file a proof of claim in this case is of consequence. Simply filling out a
22
proof of claim form requires familiarity with its almost 70 pages. The settlement agreement and
resulting proof of claim form contain multiple requisites which must be complied with if one is
to successfully prove a claim. For example, real estate claims require proof of ownership, which
often includes some form of title opinion, survey data verifying that the property lies within the
class area, as well as information regarding the size of the property and the amount of water
frontage. With respect to claims involving medical issues, loss of business profit, and diminution
of value in connection with real property sales, claimants must submit Rule 26 compliant expert
reports.
There are other specific and sometimes strict requirements for supporting documentation.
Gathering client information and supporting proof is likely to be labor intensive. The proof of
claims form is lengthy, and properly completing a submission is an involved, time consuming
process. Given the nature of the settlement agreement and proof of claim form, it is likely that a
majority of plaintiffs will be called upon to clarify and/or supplement their initial responses,
requiring the lawyers to expend additional time and money. Lawyer involvement and close
oversight should bring value to the claimant.
b. Novelty and difficulty of the question
The issues involved in this settlement and claims process are not rudimentary, nor are
they exceedingly complex. The biggest challenges for lawyers filing claims for clients seems to
be in complying with the detailed provisions of the settlement agreement and proof of claim
form. In addition, however, the lawyer must be sufficiently familiar with class action law and
procedure in order to provide sound advice and recommendations with respect to whether to opt
out or object to the proposed settlement.
c. Skill requisite to perform the legal service
23
A moderate to high amount of skill is required to interpret and comply with the
settlement agreement and proof of claim form. In addition, because this is a class action, counsel
must be knowledgeable of class action law and procedure and have the ability to evaluate
whether to opt a client out of the proposed class or object to it.
d. Preclusion of other employment by the attorney due to the
acceptance of the case
There is no evidence before the Court that otherwise available business has been
foreclosed because of conflicts of interest that occurred as a result of representing a claimant.
However, the time and labor required, and the time limitations imposed by the settlement and
claims process, are a draw on lawyer and support staff time and resources.
e. Customary fee
Neither the special master nor this Court have been presented with any evidence of any of
the contingency fee contracts in this case. However, the special master concluded, and the Court
agrees, that based upon experience in similar matters, contingency fee contracts ranging from
33% to 40% would be typical.
f. Whether the fee is fixed or contingent
Although neither the special master nor this Court has been presented with any evidence
of fee contracts or agreements in this case, the special master concluded that it is likely that the
overwhelming majority of these cases involve contingency fee agreements.
Assuming that
representation is on a contingency fee basis, there would typically be costs advanced by counsel
on behalf of individual clients. Costs incurred in this case would include gathering and
assimilating medical records, title opinions, land survey opinions, and preparing Rule 26
compliant expert reports for various types of claims. Lawyers who advance these costs are
deprived of their capital unless and until there is a recovery. In addition, items such as staff
24
support likely utilized in connection with gathering and assimilating evidence and data are
indirect costs associated with the handling of claims and such costs are not reimbursed by the
client.
g. Time limitations imposed by the client or the circumstances
The amended order preliminarily approving this class settlement sets forth a schedule for
opting out or objecting to the proposed settlement and submission of claims. Presumably, prior
to making a recommendation on opting out or objecting, a lawyer would need to gather and
evaluate his client’s individual data and evidence. Such time constraints were modest, but also
required a lawyer’s prompt attention.
h. The amount involved and the results obtained
The amounts involved will range from a relatively small amount to more substantial
claims. Because there have been no award determinations at this time, no specific results are
available for consideration.
i. Experience, reputation, and ability of the attorneys
This factor will vary from lawyer to lawyer. According to the special master, counsel for
the litigants demonstrated proficiency and professionalism and the Court agrees with the same.
j. The “undesirability” of the case
As the special master recognized, this factor seems more applicable to a common benefit
inquiry. The common benefit work led to the proposed settlement. Working with a client to
receive money through a claims process may be considered more desirable than undertaking the
risk, dedicating the time, and expending the resources necessary to engage in environmental
litigation against large companies.
k. Nature and length of professional relationship with the client
25
The special master observed that given the local nature and interest in the events leading
to this litigation, it appears that many clients in this case have had pre-existing relationships with
their lawyers. There is no discrete source of empirical data available, however, to offer any
factual underpinning with respect to the special master’s perception of the nature and length of
these relationships.
l. Awards in similar cases
If viewed as discrete individual cases, predicted fee and cost recoveries would be made
pursuant to the lawyers’ contingency fee agreements. These typically range from 33% to 40%. It
would be atypical for a fee dispute to arise in an individual case. Moreover, it would be highly
unusual for a court to conduct a review reasonableness of the fee sua sponte in an individual
case.9
9
Although not specifically enumerated as one of the Johnson factors or considerations under
Rule 1.5 of the Rules of Professional Conduct, it is worth noting that the plaintiffs have been
duly noticed and were fairly informed that retaining private counsel would be at their cost and in
addition to common benefit fees awarded to PSC counsel. Specifically, the Long Form Notice
provides, in part, as follows:
For their work on behalf of the entire Class, you will not be
charged because these lawyers will apply to the Court for payment
of their fees, costs and expenses from the Settlement
Administration Fund (see “How Will The Lawyers Be Paid,”
below). If you want to be represented by your own lawyer in this
case, you may hire one at your own expense. If you have hired a
lawyer to represent you for claims in this litigation, please contact
your lawyer for further information.
32. How will the lawyers be paid?
The $13.5 million settlement amount includes a $4.5 million
Settlement Administration Fund to (a) pay for lawyers’ fees, costs
and expenses that are approved by the Court and (b) administer the
settlement. After the Court grants “final approval” of the
settlement (see “The Court’s Fairness Hearing,” below) and any
appeals are resolved, Class Counsel will ask the Court for
attorneys’ fees, costs and expenses to be paid from the $4.5 million
26
The special master concluded that in the class actions or MDL cases reviewed where
courts have capped or limited individual contingency fee agreements, the percentages range from
14.25% to approximately 25%. As noted by the special master, however, those decisions are
highly case sensitive.
2. Summary
The special master suggested that in this particular case, the Johnson factors indicate that
a reasonable limitation on privately retained attorney’s fees would be in the range of 20% to
24%.
Among the most influential factors bearing on the special master’s report and
recommendation were the following: even though common benefit work facilitated and led to the
proposed settlement, there is a modest to significant amount of time and labor required of
lawyers to initially prepare a proof of claim form and, in many instances, there will be additional
work required to supplement the initial filing; the complex nature of the proof of claim form; the
requisite evidence that must be gathered and produced for a claimant to successfully prove a
claim; the need for lawyers representing individual clients to possess a solid working knowledge
of class action law and procedure, all of which enables the lawyers to advise clients whether to
opt out or object; the risk of limited or no recovery; and the consideration of individual client
costs that would typically be advanced by lawyers, depriving them of their capital unless and
until out of pocket costs are recovered.
This Court agrees with the special master’s consideration of the Johnson factors in
connection with the work performed by the privately retained attorneys and it finds that privately
retained attorney’s fees should be limited to 20% of any individual claimant’s recovery. First,
Settlement Administration Fund. Attorneys’ fees, costs and
expenses that are approved by the Court cannot exceed the $4.5
million Settlement Administration Fund.
27
after considering the Johnson factors, a 20% contingency fee represents a reasonable fee for the
services provided by the privately retained lawyers, especially when compared to the nature and
value of the common benefit work performed in his case. Second, allowing privately retained
attorneys to recover up to 20% of the $9,000,000 dedicated to the claimants will ensure that the
overall amount of attorney’s fees awarded in the case is no more than 39.22%10 of the
$13,500,000 settlement, which is the maximum amount of attorney’s fees the Court finds would
be reasonable in this case.11 Finally, the Court agrees with the special master that counsel should
have an opportunity to request an exception from the limitation based on extraordinary
circumstances.
II. Expenses
The PSC and associated common benefit counsel request an award of $805,000 for costs
and expenses. The expenses submitted were independently reviewed by Mr. Garrett and all
common benefit counsel confirmed to the Court during the hearing that the amount of cost and
expenses was true and accurate. The Court finds that the expenses submitted are typical and
reasonable and that an adequate basis exists for an award of $805,000 in costs and expenses.
III. Allocation of Common Benefit Fees
10
If privately retained attorneys recovered 20% of the $9,000,000 dedicated to the recovery of
the plaintiffs, the $1,800,000 recovered by the privately retained attorneys plus the $3,495,000
recover by the common benefit attorneys would represent 39.22% of the $13,500,000 settlement.
11
An overall percentage fee of 39.22% would exceed by .62% two average standard deviations
from the 25% benchmark identified in the Eisenberg and Miller study. Although the overall
amount of fees in the case is high, the increase from the 25% benchmark percentage is justified,
for the reasons stated in the Court’s consideration of the Johnson factors, for both the common
benefit attorneys and the privately retained attorneys. Additionally, as noted by the special
master, the amount of privately retained attorney’s fees will likely be less than 20% of the
$9,000,000 reserved for the claimants because at least 175 proof of claims were timely filed by
unrepresented claimants. Consequently, the cap will ensure that the total amount of attorney’s
fees does not exceed 39.22%, but the ultimate percentage fee will be somewhat less than
39.22%.
28
In this case, the common benefit attorneys have reached a unanimous agreement among
themselves and jointly recommended an allocation of common benefit fees for this Court’s
consideration. “Ideally, allocation is a private matter to be handled among class counsel.”
Murphy Oil, 582 F. Supp. 2d at 808 (citing In re Domestic Air Transp. Antitrust Litig., 148
F.R.D. 297, 357 (N.D. Ga. 1993) and Longden v. Sunderman, 979 F.2d 1095, 1101 (5th Cir.
1992)). “This is so because class counsel are generally better able to evaluate the weight and
merit of each other's contribution to the case.” See id. Although the common benefit attorneys
have admirably agreed upon an allocation, this Court is mindful of its “responsibility to closely
scrutinize the attorneys’ fee allocation.” See In re High Sulfur Content Gasoline Prods. Liab.
Litig., 517 F.3d 220, 227 (5th Cir. 2008).
Given this Court’s close supervision of the
proceedings, it is well-positioned to evaluate the proposed allocation and it finds that it is
reasonable for the reasons jointly proposed by the PSC and associated common benefit counsel.
A. Thornhill Law Firm
Tom Thornhill served as the Court-appointed liaison counsel for the PSC.
In this
capacity, Mr. Thornhill was required to coordinate with other counsel to oversee pretrial
discovery on behalf of the plaintiffs, conduct hearings with plaintiffs’ counsel, and perform a
litany of other necessary tasks. He personally conducted 12 depositions, attended 57 hearings,
engaged in 20 different settlement negotiations, and his firm attended two public hearings on
behalf of the PSC.
He also reviewed all draft pleadings, motions, and accompanying
memoranda. The Court set a trial date approximately one year from the date of the discharge and
Mr. Thornhill adopted an aggressive discovery schedule that included triple-tracking depositions
to meet deadlines. Consequently, Mr. Thornhill was restricted from participating in other cases
29
in which he asserts that the average rate of return is customarily more than double the rate in this
case.
Mr. Thornhill’s experience and skill contributed significantly to the prosecution of this
class action. The Thornhill Law Firm submitted 3,512.10 hours of common benefit work and
incurred $150,622.41 in common benefit costs. Based upon the common benefit contributions
and the nature of the work performed, an award in the amount of $1,033,565.25 to the Thornhill
Law Firm is fair and reasonable.
B. Howard & Reed
Shawn Reed was appointed co-lead trial counsel for plaintiffs and served as a member of
the PSC and class counsel. Ms. Reed is an experienced trial lawyer who has practiced law for 29
years. She has been actively involved in mass tort litigation for 20 years.
Ms. Reed was heavily involved in the prosecution of this action. She scheduled and
arranged for all discovery depositions taken by the PSC. Along with her associate attorneys,
Jonathan Pedersen and Kyle Del Hierro, Ms. Reed coordinated rolling document production for
corporate and fact witness depositions. Her firm coordinated the logistics involved in tripletracking depositions, and its lawyers conducted and/or sat second chair for the majority of the
PSC depositions. During the written discovery phase, Mr. Del Hierro reviewed, tagged for
copying, and indexed hundreds of thousands of documents and invoices at opposing counsel’s
offices. Additionally, Ms. Reed and Mr. Pederson traveled to Austin, Texas, to conduct the Rule
30(b)(6) deposition of TIN.
Ms. Reed personally attended all hearings and status conferences held before this Court
and she attended all but one of the weekly discovery conferences before U.S. Magistrate Judge
Chasez. Ms. Reed helped assemble and disseminate agenda for weekly discovery conferences,
30
argued the majority of the discovery motions filed by the PSC, and also argued against protective
orders and motions to quash filed by defendants. She and her associates drafted motions set
before Judge Chasez, helped prepare other PSC attorneys for oral argument, participated in PSC
conference calls and meetings, and worked with defendants to conduct expert inspections on the
Pearl River and at the Bogalusa Paper Mill. Ms. Reed also discovered the importance of the
computerized “Pi System” used at the Bogalusa Paper Mill, and employed a Pi expert after a
hard fought discovery battle to perform an inspection inside the Bogalusa Paper Mill on the day
the case settled.
Howard & Reed submitted 2,812.76 hours of common benefit work and $97,952.28 in
common benefit costs. Ms. Reed personally contributed 1,198.90 hours; her law partner, D.
Douglas Howard, Jr., contributed 134.20 hours; Mr. Pedersen contributed 531.16 hours; and Mr.
Del Hierro contributed 910.00 hours. Based upon the common benefit contributions and the
nature of the work performed, an award in the amount of $785,478.31 to Howard & Reed is fair
and reasonable.
C. Gainsburgh, Benjamin, David, Meunier & Warshauer, L.L.C.
Irving Warshauer was appointed co-lead trial counsel for plaintiffs and served as a
member of the PSC and class counsel. Mr. Warshauer has been practicing law for over 36 years.
As an experienced trial lawyer, he has been involved in other MDL and mass tort cases, and he
served as lead trial counsel in a similar class action.
Mr. Warshauer was involved in nearly every aspect of the investigation, development,
prosecution, and settlement of this action. He was on the trial team and he would have had
significant responsibilities at the scheduled trial of the bellwether plaintiffs. He had begun
preparations for the trial when the case settled. Mr. Warshauer was also heavily involved in
31
drafting the master complaint and the initial plaintiff questionnaires. Along with other motions
and pleadings, he drafted comprehensive written discovery to TIN and served as the point person
for receiving and distributing defendants’ discovery responses. Mr. Warshauer was first chair in
five discovery depositions, including the deposition of the president and chief operating officer
of TIN in Austin, Texas. Mr. Warshauer also assisted with the analysis of expert reports.
Additionally, Mr. Warshauer oversaw PSC financing issues and monitored the litigation and
settlement expenses for the common benefit of all class members.
Mr. Warshauer was
extensively involved in negotiations with TIN and its insurers to resolve the case and he
participated in all mediations and settlement meetings.
Mr. Warshauer’s associate attorney, Palmer Lambert, was closely involved in researching
and drafting punitive damages and class settlement pleadings. Mr. Lambert served as the point of
contact for defense counsel when working to finalize and file motions for preliminary and final
approval of the class settlement. He also secured the services of, and worked extensively with,
the lien resolution administrator; coordinated with PSC members to secure class representatives
for the settlement; participated in extensive document review; and served as first chair in two
depositions and second chair in six others. Mr. Lambert worked with PSC members and the
notice administrator to ensure compliance with Rule 23 guidelines.
Lastly, he and Mr.
Warshauer worked closely with opposing counsel to finalize the settlement agreement and draft
the necessary memoranda to obtain preliminary and final approval.
Gainsburgh, Benjamin, David, Menuier & Warshauer, L.L.C. submitted 1,023.80 hours
of common benefit work and $101,484.26 in common benefit costs. Mr. Warshauer and Mr.
Lambert personally contributed 747 hours and 241 hours, respectively. Based upon the common
32
benefit contributions and the nature of the work performed, an award of $543,660.90 to
Gainsburgh, Benjamin, David, Meunier & Warshauer, L.L.C. is fair and reasonable.
D. N. Frank Elliot III, L.L.C.
Frank Elliot served as a member of the PSC and as class counsel. Mr. Elliot has been
practicing law for almost 18 years and, as an experienced trial lawyer, he has been involved in a
number of MDL and mass tort cases.
Mr. Elliot began investigating the incident shortly after the discharge in August 2011. Mr.
Elliot met with fact witnesses and secured a court order to preserve potential evidence. He helped
coordinate inspections, sampling activities, and laboratory tests for the Bogalusa Paper Mill, the
Waste Water Treatment Facility, and the Pearl River. He worked with others to formulate and
develop expert opinions in support of various categories of claimants, including property owners
and recreational and commercial fishermen.
Mr. Elliot participated in researching and drafting pleadings, motions, and memoranda.
He worked extensively on the master complaint, memoranda in support of class certification,
punitive damages, insurance issues, and maritime claims. He also participated in discovery
activities such as drafting discovery requests, taking depositions, and reviewing documents. He
attended status conferences with this Court and assisted in the preparation of arguments and
reports to be made at conferences and hearings. Additionally, as a member of the PSC, Mr.
Elliot was involved in the administration of the case and participated in addressing issues from
strategy sessions to financial matters. Finally, Mr. Elliot participated in negotiations with TIN
and its insurers to resolve the case, obtain preliminary and final approval of the settlement, and
ensure adequate notice and administration of claims.
33
N. Frank Elliot III, LLC submitted 1,521.10 hours of common benefit work and
$103,484.75 in common benefit costs. Mr. Elliot personally contributed 1,450.80 hours and his
staff contributed 74.60 hours. The Court finds that an award of $452,947.47 to N. Frank Elliot
III, LLC is fair and reasonable.
E. Arata Law Office; Lemmon Law Firm; Harrison Law, LLC
Arata Law Office, the Lemmon Law Firm, and Harrison Law, LLC, jointly participated
in the action from its early stages.
As a member of the PSC and as part of the onsite
investigation team, William H. Arata was among the first attorneys to investigate the facts and
identify potential witnesses before the first lawsuit was filed. He took photographs and videos at
the scene while the incident was in progress. He later secured a watercraft and examined the
perimeter of the entire 50-acre site, along with the bayous and tributaries of the Pearl River. Mr.
Arata’s firm was instrumental in developing the claims of various plaintiff classes and subclasses
and he participated in the depositions of both bellwether plaintiffs and named plaintiffs.
Additionally, Mr. Arata was involved in discussions with the special master and claims
administrator regarding the online claims process.
Mr. Lemon worked with Mr. Harrison and Mr. Elliot to review and evaluate DEQ files,
prepare for the depositions of TIN’s environmental staff, and develop theories of environmental
law and punitive damages. Mr. Lemon consulted with Professor Thanassi Yiannapoulis on behalf
of the PSC regarding theories of property damage that were not addressed under Louisiana law.
Mr. Lemon worked with experts and other PSC members to develop appropriate sampling
locations and protocols. He also took or assisted with several depositions, including the Rule
30(b)(6) deposition of TIN in Austin, Texas, and he researched and reviewed documents
regarding witnesses asserting the Fifth Amendment, adverse inferences, and related issues. At
34
the Court’s request, Mr. Lemon handled the production of the class profile forms and helped the
Court notify individual plaintiffs of deficient submissions. Finally, having previously worked
with the mediator and lead counsel for TIN, Mr. Lemon assisted early negotiations that
eventually led to settlement discussions.
Mr. Harrison provided assistance drafting the initial master complaint and other
pleadings, including pleadings related to environmental claims and discovery motions. Mr.
Harrison and his staff conducted research and analysis on a number of specific environmental
issues. Furthermore, Mr. Harrison participated in site visits; conducted three depositions;
participated in a variety of discovery activities; and identified the location of the outfall.
Arata Law Office, the Lemmon Law Firm, and Harrison Law, LLC jointly submitted
2,088.35 hours of common benefit work and $67,964.70 in common benefit costs. Therefore,
based upon the common benefit contributions and the nature of the work performed, an award of
$482,469.43 to Arata Law Office, the Lemmon Law Firm, and Harrison Law, LLC is fair and
reasonable.
F. The Bezou Law Firm
Jacques F. Bezou was appointed to the trial team for plaintiffs and served as a member of
the PSC and class counsel. Mr. Bezou has more than 40 years of experience as a litigator and the
Court knows him to be a gifted trial attorney. He conducted several critical depositions of TIN
employees. He attended and participated in every status conference, discovery conference, and
hearing with the Court. He was also heavily involved in the settlement negotiations, including
attending mediations and continuing negotiations.
Stacy R. Palowsky researched and drafted memoranda on insurance-related issues,
attended conferences, and also assisted with discovery-related tasks. She researched and briefed
35
nearly all the issues raised by the insurers, including motions to dismiss, compel arbitration, and
for summary judgment relating to complex insurance coverage, choice of law, and arbitration
issues. She also attended several depositions related to insurance issues, attended conferences
with the Court, assisted with preparing the initial questionnaire to claimants, assisted with
discovery tasks, assisted in the drafting and preparation of pleadings unrelated to insurance
matters, assisted in the preparation of certain experts’ reports, and attended mediation to address
insurance issues.
The Bezou Law firm submitted 750.43 hours of common benefit work and $99,363.86 in
common benefit costs. Based upon the common benefit contributions and the nature of the work
performed, an award of $366,528.59 to The Bezou Law Firm is fair and reasonable.
G. Becnel Law Firm, L.L.C.
Daniel E. Becnel, Jr. served as a member of the PSC and class counsel. Mr. Becnel,
worked directly with opposing counsel to overcome initial settlement barriers. Mr. Becnel’s
experience in negotiating complex class settlements assisted in achieving a settlement amount
that exceeded several PSC members’ expectations.
He assisted in resolving a number of
objections raised by defendants during the negotiation process. Mr. Becnel also played a key
role in involving Jeff Whitlow as claims administrator to the special master.
Mr. Becnel and his associate, Kevin Klibert, took numerous depositions, assisted in the
drafting of memoranda, and defended the deposition of Ronnie Penton, a landowner class
representative and one of the largest developers along the Pearl River. They worked extensively
with the notice expert and the special master’s office once the parties approved the settlement.
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The Becnel Law Firm submitted 437.75 hours of common benefit work and $95,000 in
common benefit costs. Based upon the common benefit contributions and the nature of the work
performed, an award of $323,040.32 to Becnel Law Firm, L.L.C. is fair and reasonable.
H. The Tammy Tran Law Firm
Tammy Tran served as a member of the PSC and as class counsel. Tammy Tran
participated in this matter since its inception and assisted the PSC in several respects. Ms. Tran
researched legal issues relating to the merge of International Paper and TIN including reviewing
the corporate filings of TIN and International Paper and analyzing the
accuracy of their
corporate disclosures. Ms. Tran researched and drafted memoranda relating to maritime law,
commercial fisherman claims, gross negligence under Texas law, and choice of law issues
involving insurance coverage.
Ms. Tran also participated in the decision-making process
regarding discovery strategies, motion practice strategies, deposition strategies, and trial
strategies. Her firm participated in numerous settlement discussions and reviewed settlement
documents.
Ba Nguyen reviewed documents produced by the U.S. Army Corp. of Engineers related
to technical data of the spill site, performed legal research relating to federal and state law,
drafted memoranda and motions, and reviewed discovery, including an analysis of the 30(b)(6)
deposition transcript.
The Tammy Tran Law Firm submitted 630 hours of common benefit work and $85,000
in common benefit costs. Based upon the common benefit contributions and the nature of the
work performed, an award of $308,181.99 is fair and reasonable.
Conclusion
For the foregoing reasons,
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IT IS ORDERED that the motion for common benefit fees and expenses is GRANTED.
IT IS FURTHER ORDERED that the proposed allocation is APPROVED.
IT IS FURTHER ORDERED that contingency fee contracts for privately retained
lawyers are limited to 20% of any individual plaintiff’s recovery, subject to further review by
this Court in extraordinary circumstances. Any request for this Court to review a particular
attorney’s circumstances and fee arrangement shall be filed no later than Tuesday, August, 27,
2013.
IT IS FURTHER ORDERED that any motion to distribute funds shall be filed
consistent with the terms of the settlement agreement.
New Orleans, Louisiana, August 21, 2013.
___________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
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