A recent Law 360 story by Emille Ruscoe, “Atty Wants $32M in Fees From Fiat Chrysler Emission Deal,” reports that a New York federal judge was asked to approve $32 million in fees for attorneys who negotiated a $110 million settlement in an investor suit accusing Fiat Chrysler of lying about its compliance with safety regulations and cheating on emissions tests. In addition to the $32 million for the attorneys, which comprises nearly a third of the total settlement, the class counsel asked to be reimbursed $2.6 million for their expenses. They also want the named plaintiffs in the case to be paid $15,000 each. The settlement total after the expenses would be about $75 million.
The plaintiffs' attorneys calculated that they spent upwards of 44,000 hours on the case, which stretched out over four years. They estimated the cost of their labor at about $23 million, assuming an approximate $518 hourly rate, which was then multiplied total by a factor of 1.4, in the "lodestar" method that is "intended to approximate what counsel would receive if they were bargaining for the services in the marketplace." "Awards of fair attorneys' fees from a common fund should also serve to encourage skilled counsel to represent those who seek redress," the nine attorneys for the plaintiffs noted in their explanation of the fee, characterizing the request percentage total as comparable to other fees awarded within the jurisdiction.
The price tag on the expenses, they said, reflects, among other things, the costs associated with work related to the trial that the attorneys had to conduct in Detroit near Fiat Chrysler's American headquarters, far from the federal court in New York City where the case was adjudicated. The attorneys emphasized the risk they undertook in footing those bills themselves.
"Class counsel pursued plaintiffs' claims against defendants in this complex litigation with no guarantee of ever being compensated for the investment of time and money that the case would require," they said. They stressed that the defendants waited to settle until after the class was certified, thereby increasing the risk they took on. Moreover, they said, their work continues: they'll assist class members with proofs of claim, guide the overall claims process and answer the class members' questions throughout.
They're not asking for much, they claimed. "A 30% fee will not cause a windfall here," they said, as part of their explanation for why their requested total is reasonable.
The car company settled in April, ending a suit that investors brought when their stock dropped 5% after a joint Department of Justice and Environmental Protection Agency investigation charged the auto company with violating the Clean Air Act. Court documents indicate the mediation talks went on for months, and in a joint statement at the time of the settlement, the parties said the agreement occurred "solely to eliminate the uncertainty, burden and expense of further protracted litigation."