A recent law.com story, “2^nd Circuit Recognizes Firm’s Contribution but Rebuffs $17 Million Fee Request” reports that a law firm that claimed it was “solely responsible” for a $245 million federal securities class action settlement has lost its bid to receive an additional $17 million in attorney fees.  In Re: Adelphia Communications Corp. Securities & Derivative Litigation, the 2^nd U.S. Circuit Court of Appeals agreed that non-lead counsel Chimicles & Tikellis (C&T) had conferred a substantial benefit to the class, but it nonetheless held that the district court had not erred when it approved the lead counsel’s allocation of only $155,610 in attorney fees to C&T.

The fee dispute arose from 30 lawsuits, including two class actions brought by C&T, against Adelphia, a cable television provider that went belly up after its founder was accused of looting millions of dollars from the company.  In 2003, these and other suits against Adelphia were transferred to the Southern District of New York, where they were consolidated.  C&T argued that it provided an “independent benefit for the Class that no other plaintiff, including the Lead Plaintiffs provided,” and sought the district court to hike their fees to $17 million.  The district court denied their request.

On appeal, C&T maintained that the district court misapplied Goldberger v. Integrated Resources Inc.  The firm also argued that the lodestar analysis should be applied to non-lead counsel seeking attorney fees for pre-appointment work, and C&T also insisted that the district court should have made a “qualitative comparison between  non-lead counsel’s contribution and other counsel’s contribution to the ultimate recovery.”  In this case, the appeals noted the Goldberger factor alone, the time and hours expended by counsel weighs heavily against C&T, given that it was looking to be paid $17 million in attorneys’ fees for 381.1 hours of work.  “Forty-five thousand dollars per hours seems to us to be quite high regardless of the lawyer’s talent, ability, or contribution to a common fund,” the judge wrote.