Board Of Trustees Of The AFTRA Retirement Fund et al v. JPMorgan Chase Bank, N.A.
Filing
191
MEMORANDUM OPINION AND ORDER:#101906 For the reasons stated above, Plaintiffs' Motion for Award of Attorneys' Fees, Reimbursement of Expenses and Case Contribution Award to Named Plaintiffs is granted. The Clerk of the Court is directed to close this motion [Docket No. 185]. This case, and all related cases, shall remain closed. SO ORDERED. (Signed by Judge Shira A. Scheindlin on 6/07/2012) (ama) Modified on 6/13/2012 (jab).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------ )(
BOARD OF TRUSTEES OF THE AFTRA
RETIRENIENT FUND, in its capacity as a
fiduciary of the AFTRA Retirement Fund,
individually and on behalf of all others
similarly situated,
MEMORANDUM
OPINION AND ORDER
Plaintiff,
09 Civ. 686 (SAS)
- againstJPMORGAN CHASE BANK, N.A.,
Defendant.
------------------------------------------------------ )(
BOARD OF TRUSTEES OF THE
IMPERIAL COUNTY EMPLOYEES'
RETIRENIENT SYSTEM, in its capacity
as a fiduciary of the Imperial County
Employees' Retirement System,
individually and on behalf of all others
similarly situated,
Plaintiff,
- againstJPMORGAN CHASE BANK, N.A.,
Defendant.
------------------------------------------------------ )(
THE INVESTMENT COIVIMITTEE OF
THE MANHATTAN AND BRONX
SURFACE TRANSIT OPERATING
AUTHORITY PENSION PLAN, in its
capacity as a fiduciary of the MaBSTOA
Pension Plan, individually and on behalf of
all others similarly situated,
Plaintiff,
- againstJPMORGAN CHASE BANK, N.A.,
Defendant.
------------------------------------------------------ X
SHIRA A. SCHEINDLIN, U.S.D.J.:
I.
INTRODUCTION
This class action arises out of JPMorgan Chase Bank, N.A.'s
("JPMC's") investment of certain "securities lending" clients' cash collateral in the
June 2009 Medium-Term Notes (the "MTNs") of Sigma Finance, Inc. ("Sigma"), a
structured investment vehicle ("SIV") that collapsed on September 30, 2008. 1
Class members governed by the Employee Retirement Income Security Act
I granted plaintiffs' motion for class certification on August 4,2010.
See Board o/Trustees o/the AFTRA Retirement Fund v. JPMorgan Chase Bank,
N.A., 269 F.R.D. 340, 355 (S.D.N.Y. 2010).
2
("ERISA") assert claims for breach of the fiduciary duty to prudently manage plan
assets. Class members not governed by ERISA assert analogous prudence claims
under New York common law, in addition to breach of their securities lending
agreements with JPMC.
On March 28, 2012, the parties executed a Stipulation of Settlement
("Stipulation") that settled these claims and related third-party claims in exchange
for $150 million in cash or credits towards Sigma Collateral Deficiencies. 2
Following the Court's preliminary approval ofthe proposed settlement,3 plaintiffs
moved for Final Approval of Settlement, Approval of Class Notice, and Approval
of Plan of Allocation. 4 Plaintiffs' counsel also moved for an Award of Attorneys'
Fees, Reimbursement of Expenses, and Case Contribution Award to Named
Plaintiffs. 5 A fairness hearing was held on June 4,2012, and no objections were
raised. I orally approved the settlement at the fairness hearing and entered final
judgment on June 5, 2012. For the reasons stated below, plaintiffs' counsels'
motion for an Award of Attorneys' Fees, Reimbursement of Expenses, and Case
Capitalized terms not defined herein have the meaning given to them
in the Stipulation.
2
3
See 3/30112 Order [Docket No. 178].
4
See
5
See Docket No. 185.
Docket No. 180.
3
Contribution Award to Named Plaintiffs is granted.
II.
ATTORNEYS' FEES AND EXPENSES
Plaintiffs' counsel request $ 1,794,985.19 in expenses. In support of
these expenses, plaintiffs' counsel have submitted a summary expense report for
each firm.6 These costs include routine expenses relating to copying, court fees,
postage and shipping, phone charges, legal research, and travel and transportation.
The bulk of the expenses relate to trial preparation, experts, and document
production and review. 7 No objections were filed to these expenses. The expenses
total approximately one percent of the Settlement Amount.
I find that these expenses are reasonable. These expenses, particularly
those attributable to professional services and trial preparation, were a contributing
factor to achieving the settlement. 8 Accordingly, I grant plaintiffs' counsel
$1,794,985.19 in expenses.
In addition to expenses, plaintiffs' counsel also request a fee of
See 5/7112 Declaration of Peter H. LeVan, Jr., plaintiffs' counsel, in
Support of Plaintiffs' Motion for Award of Attorneys' Fees, Reimbursement of
Expenses and Case Contribution Award to Named Plaintiffs.
6
7
See id.
See In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 468
(S.D.N.Y. 2004).
8
4
twenty-five percent of the Settlement Amount, or $37.5 million. 9 Although I
intend to use the percentage method to award fees in this matter, the lodestar is
often used as a cross-check. Plaintiffs represent that the aggregate loadstar for all
plaintiffs' firms is $13,106,879 for 28,860 hours.1O Thus, the requested fee
represents a multiplier of2.86. Because the lodestar is being used merely as a
cross-check, it is unnecessary for the Court to delve into each hour of work that
was performed by counsel to ascertain whether the number of hours reportedly
expended was reasonable. I 1 After reviewing the supporting declarations, which
include a summary of the hours expended by and the billing rates for every
attorney, paralegal, and staff member that worked on this litigation, I find that
$13,106,879 is a reasonable lodestar for the time expended by plaintiffs' firms.
I further find that a fee of twenty-five percent, or $37.5 million, is
reasonable after assessing the Goldberger factors. This fee is well within the
See Memorandum of Law in Support of Plaintiffs' Motion for Award
of Attorneys' Fees, Reimbursement of Expenses and Case Contribution Award to
Named Plaintiffs at 1.
9
10
See id. at 20.
See Goldberger v. Intergrated Res., Inc., 209 F.3d 43, 50 (2d Cir.
2000) (citing In re Prudential Ins. Co. Am. Sales Litig., 148 F.3d 283,342 (3d Cir.
1998) ("Of course, where [the lodestar is] used as a mere cross-check, the hours
documented by counsel need not be exhaustively scrutinized by the district
court.").
Ll
5
standard range for fee awards given under Goldberger. 12
First, I find that the time and labor expended by plaintiffs' counsel
support a 25% fee. Plaintiffs' counsel have invested approximately 28,860 hours
in these actions. Plaintiffs' counsel took the case to the eve of trial, litigating a
class certification motion, a partial summary judgment motion, Daubert motions,
and motions in limine. They also expect additional time to be expended
administering and distributing the settlement funds. Plaintiffs' counsel have
devoted substantial time and effort to this matter, justifying the awarded fee.
Second, this action, like many ERISA class actions, has been complex
and time consuming. The awarded fee is reasonable compensation considering the
size of this litigation.
Third, the risk of this litigation also supports the awarded fee. "It is
well-established that litigation risk must be measured as of when the case is
filed."J3 As discussed at the fairness hearing, there were ample risks to plaintiffs
establishing liability and damages. I find that a risk multiplier of 2.86 over the
See Theodore Eisenberg & Geoffrey Miller, A New Look at Judicial
Impact: Attorneys' Fees in Securities Class Actions After Goldberger v. Integrated
Resources, Inc., 29 Wash. U. IL. & Pol'y 5, 18 (2009) (noting that mean and
median fee awards under Goldberger have been 26.03% and 27.25%,
respectively).
I2
13
Goldberger, 209 F .3d at 55 (citations omitted).
6
estimated lodestar adequately compensates plaintiffs' counsel for the risk they
assumed.
Fourth, I find that plaintiffs' counsel ably represented the interests of
the Class. This class consisted entirely of sophisticated institutional investors.
These class members had access to counsel, advisors, and consultants. Yet none of
these class members objected to the fee request, or sought to opt-out and pursue
their claims separately, despite two opportunities to do so. Indeed, the class
representatives negotiated the 25% fee, and arms-length negotiation of the fee is a
significant consideration because the court's primary goal in awarding attorney's
fees is to approximate the prevailing market rate for counsels' services. 14
Moreover, plaintiffs' counsel obtained releases of certain claims against class
members as part of the settlement. Finally, I note that every class member
affirmatively signed an acknowledgment form signaling an endorsement of the
request for attorney's fees. Plaintiffs' counsels' diligent representation of the class,
as acknowledged by the class representatives and the class members, supports the
awarded fee.
See Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of
Albany, 522 F.2d 182, 184 (2d Cir. 2008) ("[T]he district court (unfortunately)
bears the burden of disciplining the market, stepping into the shoes of the
reasonable, paying client, who wishes to pay the least amount necessary to litigate
the case effectively.").
14
7
Fifth, I find that a 25% fee is reasonable in relation to the settlement.
Plaintiffs' counsel has obtained a substantial settlement justifying an award of a
substantial amount.
Sixth, I find that the awarded fee is adequate to further the public
policy of encouraging private lawsuits to protect investors. Plaintiffs' counsel will
recover nearly three times their lodestar and will recover all expenses invested in
these lawsuits. In these actions, a 2.86 multiplier of the lodestar is more than
sufficient to further public policy goals.
After reviewing the Goldberger factors I award plaintiffs' counsel
fees of25% of the Settlement Amount, or $37.5 million. I find that a risk
multiplier of2.86 is adequate, but not excessive, in light of the Goldberger factors.
This fee should therefore adequately compensate
but not
overcompensate - counsel for their time and labor. The award of fees and
expenses are intended to compensate plaintiffs' counsel for all of the time and
labor spent until the conclusion of this litigation, including that associated with the
distribution of the settlement fund.
III.
CLASS REPRESENTATIVES
Class Counsel also request $50,000 as a contribution award for each
of the three named plaintiffs. I find that the named plaintiffs diligently performed
8
the tasks expected of them and reasonably incurred costs and expenses in
responding to document requests and interrogatories, producing responsive
documents, reviewing filings, attending depositions, and communicating regularly
with plaintiffs' counseL Accordingly, I award each of the named plaintiffs a
contribution award of $50,000.
IV.
CONCLUSION
For the reasons stated above, Plaintiffs' Motion for Award of
Attorneys' Fees, Reimbursement of Expenses and Case Contribution Award to
Named Plaintiffs is granted. The Clerk of the Court is directed to close this motion
[Docket No. 185]. This case, and all related cases, shall remain closed.
Dated:
New York, New York
June' 1,2012
9
- Appearances
For Plaintiffs:
Joseph H. Meltzer, Esq.
Peter H. LeVan, Jr., Esq.
Barroway Topaz Kessler Meltzer &
Check, LLP
280 King of Prussia Road
Radnor, Pennsylvania 19087
(610) 667-7706
Bradley E. Beckworth, Esq.
Brad Seidel, Esq.
Nix Patterson & Roach, LLP
205 Linda Drive
Daingerfield, Texas 75638
(903) 645-7333
Milo Silberstein, Esq.
Dealy & Silberstein, LLP
225 Broadway, Suite 1405
New York, New York 10007
(212) 385-0066
David L. Wales, Esq.
Bernstein, Litowitz, Berger &
Grossman, LLP
1285 Avenue of the Americas
New York, New York 10019
(212) 554-1400
Gregory M. Nespole, Esq.
Wolf Haldenstein Adler Freeman
HerzLLP
270 Madison Avenue
New York, New York 10016
(212) 545-4761
For JPMC:
Lewis Richard Clayton, Esq.
Jonathan H. Hurwitz, Esq.
Samuel E. Bonderoff, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
(212) 373-3215
10
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