Kaltman v. Petroleo Brasileiro S.A.- Petrobras
Filing
866
OPINION & ORDER re: 839 MOTION for Attorney Fees: In sum, Objector is hereby awarded attorneys' fees in the amount of $11,731.65, to be taken out of Class Counsel's fee award. The Clerk is instructed to close docket number 839. (Signed by Judge Jed S. Rakoff on 8/14/2018) (jwh)
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 1 of 8
USOCSDNY
DOCUMFNT
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ELECT'!(C,. !CALLY FILED
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-------------------------------------x
In re: PETROBRAS SECURITIES
LITIGATION
OPINION & ORDER
-------------------------------------x
JED S. RAKOFF, U.S.D.J.
By Opinion and Order dated June 22, 2018, this Court
granted final approval of the Settlement Agreement in the
instant action and awarded attorneys'
fees to Class Counsel.
Dkt. 834. Now before the Court is the motion of objector William
Thomas Haynes
("Objector")
for an award of attorneys'
his counsel, the Center for Class Action Fairness
fees for
("CCAF"),
in
the amount of $199,400.
For the reasons stated below, Objector will be awarded
attorneys'
fees, but only in the amount of $11,731.65
Familiarity with all prior proceedings is here assumed.
In
brief, as they relate to this fee request, Objector challenged
both the certification of the settlement class and Class
Counsel's fee request. See Objection of William Thomas Haynes,
as Trustee for the Benefit of W Thomas and Katherine Haynes
Irrevocable Trust for the Benefit of Sara L. Haynes, to the
Proposed Class Action Settlement and Attorneys'
Fee Request,
Dkt. 797. On June 22, 2018, this Court approved the Settlement
Agreement,
rejecting Objector's arguments in opposition, and
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 2 of 8
awarded attorneys'
fees to Class Counsel, although in a
significantly lower amount than requested. See Opinion and Order
Dated June 25, 2018, Dkt. 834. As described below, one of the
bases for one aspect of the reduction in fees was directly
influenced by one of the Objector's arguments. Objector
subsequently filed the instant motion for his attorneys'
See Notice of Motion for Attorneys'
fees.
Fees, Dkt. 839. Class
Plaintiffs oppose. See Class Plaintiffs' Memorandum of Law in
Opposition to CCAF's Motion for Attorneys'
Fees, Dkt. 845.
"[I]t is well settled that objectors have a valuable and
important role to perform in preventing collusive or otherwise
unfavorable settlements, and that ... they are entitled to an
allowance as compensation for attorneys'
fees and expenses where
a proper showing has been made that the settlement was improved
as a result of their efforts." White v. Auerbach, 500 F.2d 822,
828
(2d Cir. 1974). "The actions of the party seeking to recover
costs must, however, be a substantial cause of the benefit
obtained." In re Holocaust Victim Assets Litig., 424 F.3d 150,
157
(2d Cir. 2005) . 1 In the absence of such a showing, objectors
are not entitled to fees. See In re Currency Conversion Fee
Ant i t r us t L i t i g . , 2 6 3 F . R . D. 11 0 , 1 3 2 ( S . D. N . Y . 2 0 0 9 ) . Wi thin
these general guidelines, "the trial judge has broad discretion
Unless otherwise indicated, case quotations omit all internal
quotation marks, alterations, footnotes, and citations.
1
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 3 of 8
in deciding whether, and in what amount, attorneys'
fees should
be awarded, since he is in the best position to determine
whether the participation of objectors assisted the court and
enhanced the recovery." White, 500 F.2d at 828.
The Court finds that Objector significantly contributed to
one aspect of the class's recovery, because a $46 million
reduction in Class Counsel's fee award is directly attributable
to Objector's argument that Class Counsel's expenditures on
Brazilian attorneys should be classified as costs rather than
attorneys'
fees. Objector was the only one to raise this
argument and,
in its Opinion ordering this reclassification, the
Court referred specifically to Objector as having raised the
issue and having identified the relevant case law. See Opinion
and Order Dated June 25, 2018 at 32-33, Dkt. 834. Because the
reclassification of Brazilian attorneys improved the overall
amount of the settlement awarded to the class, Objector is
entitled to attorneys'
fees attributable to advancing this
argument.
However, the remainder of Objector's arguments on
attorneys'
fees failed to benefit the class or otherwise "assist
the court in framing the issues for the settlement ... or affect
the outcome as to fees." In re Excess Value Ins. Coverage
Litig.,
598 F. Supp. 2d 380, 393 (S.D.N.Y. 2005). Objector
devoted approximately half of his brief to arguments that the
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 4 of 8
Settlement Class could not be certified, arguments rejected in
their entirety by the Court. Aside from the classification of
Brazilian attorney expenses, Objector's arguments as to the
excessiveness of Class Counsel's fee request were general ones that the multiplier was too high, the rates excessive, the
request too high a percentage of the class award - that did not
assist the Court in reaching its decision to award Class Counsel
lower fees than those sought.
Objector argues that he should still receive fees for his
arguments on Class Counsel's fee request as he "could not have
known in advance of the objection deadline if the Court would
reduce attorneys'
fees as significantly as it did on its own,"
See Memorandum in Support of Motion for an Award of Attorneys'
Fees ("Obj. Memo.") at 4-5, Dkt. 840. Some courts "have
recognized that objectors' counsel are entitled to an award of
fees even where the Court would have likely reached the same
result, with or without the objectors' comments." Park v.
Thomson Corp., 633 F. Supp. 2d 8, 11
(S.D.N.Y. 2009). However,
other courts have denied obJectors fees where "modif1cat1ons
were entirely on the Court's initiative and devised by the
Special Master and the parties," or where they were "so general
and repetitive that they were of no assistance to an area with
which th[e] Court is intimately familiar." In re Currency, 263
F.R.D. at 132. See also In re Anchor Sec. Litigation, No. CV-88-
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 5 of 8
3024, 1991 U.S. Dist. LEXIS 4573, at *6 (E.D.N.Y. Mar. 22, 1991)
(Denying fee request where objector challenged plaintiffs'
counsel's request for "a significant departure from the lodestar
amount" and "[p]revailing case law in this area of which this
Court was well aware determined that they were not entitled to
it."). The Second Circuit has also found it significant if "the
court's misgivings were a matter of record" before being raised
by the objector. See White, 500 F.2d at 829.
In this case, the Court expressed concerns on the record as
to Class Counsel's anticipated fee request as early as the
February 23, 2018 Preliminary Approval Hearing. See Feb. 23,
2018 Tr. at 11:14-20 (Noting that Class Counsel's requested fee
award vastly exceeded the commonly-approved range and asking
"why in the world" the Court should approve such a large fee)
The Court ordered Class Counsel to submit its time records to
defendant's counsel for review,
Id. at 33:22-36:14, and
defendant's counsel subsequently produced an analysis raising
numerous issues with Class Counsel's fee request. See a Letter
from Lewis J. Liman to the Court dated May 7, 2018, Dkt. 793.
Objector did not advance this analysis, or otherwise alert the
Court to case law on attorneys' fees unfamiliar to the Court.
Accordingly, Objector is entitled only to attorneys'
fees for
his argument concerning the classification of Brazilian attorney
as the only argument that contributed to the settlement.
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 6 of 8
When granting fee awards, district courts are given "broad
discretion" in determining what is reasonable under the
circumstances. Luciano v. Olsten Corp., 109 F.3d 111, 115 (2d
Cir. 1997). See also Cmty. Tv Sys. v. Caruso, 284 F.3d 430, 437
(2d Cir. 2002)
(appellate review "of an award of attorneys'
fees
is highly deferential to the district court"). Courts typically
calculate reasonable attorneys'
fees using either a percentage
of recovery method, where the fee is set as a percentage of the
recovery, or the lodestar method, "under which the district
court scrutinizes the fee petition to ascertain the number of
hours reasonably billed to the class and then multiplies that
figure by an appropriate hourly rate." Goldberger v. Integrated
Re~,
209 F.3d 43, 47
(2d Cir. 2000).
Objector has requested $199,400, a lodestar amount of
$117,316.50 with a multiplier of 1.7.
The lodestar is based on
231.7 total hours billed by four attorneys, one of whom billed
124.6 hours at a rate of $465 per hour and the other three of
whom billed the remainder of the hours at rates ranging from
$375 to $900.
See Deel. of Anna St. John at 6, Dkt. 841.
However, as evident from the above discussion, the vast majority
of this time was spent on activities and arguments unrelated to
the one that benefitted the class. The timesheets submitted by
CAFA specify that 7.7 hours, billed at $375 per hour, were spent
researching the Brazilian attorney argument, but the timesheet
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 7 of 8
entries do not isolate the number of hours spent reviewing,
drafting, and editing that argument as compared to other
arguments in the brief.
The Court finds a fee award of $11,731.65 warranted, which
represents 10% of Objector's lodestar. A substantial reduction
is appropriate as the vast majority of Objector's briefing
concerned unsuccessful arguments - the useful argument on the
Brazilian attorneys constituted only 1.5 pages of ObJector's 25page brief. However, because the argument was novel, wellresearched, and directly effectuated a substantial costs savings
to the class,
the Court finds the award of a full 10% of the
lodestar appropriate. This percentage is consistent with what
the Court finds to be a reasonable lodestar, allowing for 25
hours of research, drafting and editing at a junior level,
billed at $375, and 6.7 hours of review at a more senior level
billed at $465.
As Objector was only involved in the case for a short
period of time and faced no risks in his involvement, the Court
finds no justification for granting Objector a multiplier.
Accordingly, this request is denied. The fact that the Court
approved a multiplier for class counsel does not entitle
Objector to a multiplier. See, e.g.,
Park,
633 F. Supp. at 13
(Granting a mult1pl1er to class counsel but denying it to the
objector as the objector's involvement "spanned a far shorter
Case 1:14-cv-09662-JSR Document 866 Filed 08/15/18 Page 8 of 8
interval" and did not entail the nsignificant risks" class
counsel faced).
Objector's fee award should be funded from Class Counsel's
fee award as Class Counsel's inappropriate, and potentially
costly, class1f1cation of its expenditure on Brazilian attorneys
as attorneys'
fees created the need for the objection. As
Objector illustrated, the law clearly barred Class Counsel's
categorization of these expenses, and Class Counsel never should
have sought recovery of these costs as attorneys'
fees.
It would
be inequitable to reduce class members' award for CldSS
Counsel's failure.
In sum, Objector is hereby awarded attorneys'
fees in the
amount of $11,731.65, to be taken out of Class Counsel's fee
award.
The Clerk is instructed to close docket number 839.
SO ORDERED.
Dated:
New York, NY
August f!/.-r 2018
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