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$2.4M Fee Award in Kodak Shareholders Action

October 6, 2016 | Posted in : Contingency Fees / POF, Expenses / Costs, Fee Award, Fee Calculation Method, Fee Reduction, Hourly Rates

A recent Bloomberg BNA story, “Kodak Stock-Drop Case Yields $2.4 Attorneys’ Fees Award,” reports that attorneys who represented Eastman Kodak Co. 401(k) plan participants were awarded $2.4 million in attorneys’ fees for their efforts in pursuing claims that the plan’s fiduciaries violated ERISA by retaining company stock in the plan (In re Eastman Kodak ERISA Litigation, W.D.N.Y., No. 6:12-cv-06051, 10/4/16 ).

The fee award follows a $9.7 million settlement reached earlier this year between Kodak and the participants.  The attorneys had asked for 30 percent of that settlement as attorneys’ fees, but Judge David G. Larimer of the U.S. District Court for the Western District of New York reduced that amount to 25 percent for a total of $2,425,000 plus costs.

In reducing the award, Larimer said the requested 30 percent fee was excessive in light of the circumstances of the case.  Six large firms, contributing at least 30 attorneys and nine paralegals, sought full compensation, Larimer said.

The “high hourly billing rates” exceeded what the court found reasonable.  The court took issue with the billing rates requested by class counsel, which ranged from $250-$390 per hour for partners from in-district counsel to as much as $950 per hour for out-of district counsel.  These rates grossly exceed the typical reasonable hourly rates in this district, Larimer concluded.

The ruling contrasts with a decision issued last week in Kruger v. Novant Health, Inc. (M.D.N.C. 2016) by a federal judge in North Carolina who awarded $10.7 million in attorneys’ fees to class counsel in an Employee Retirement Income Security Act 401(k) fees case.  The judge there found that a billing rate of $998 per hour for veteran attorneys was reasonable.