A recent Law 360 story, “Judge Questions Robbins Geller Fees in $1.575B HSBC Deal,” reports that an Illinois federal judge took issue with $1.2 million worth of expenses that Robbins Geller Rudman & Dowd LLP accumulated on its way to a record-breaking $1.575 billion settlement between HSBC Holdings PLC unit Household International Inc. and a class of investors alleging securities fraud, saying that the expenses weren’t sufficiently supported.

When U.S. District Judge Jorge L. Alonso signed off on the deal that ended the 14-year lawsuit on Oct. 20, he did so over the objections of ex-Household International employee and class member Kevin McDonald, who had argued that the $388 million requested by Robbins Geller in fees and expenses was excessive.  Judge Alonso did, however, continue proceedings to allow for supplemental briefing on hotel, transportation and meal expenses.

Even with additional information, the judge still found that some requests were too costly to approve without appropriate descriptions of what was purchased and why those expenses were necessary.  If Robbins Geller wants to submit a revised motion for expenses, it must tell the court and submit a new motion by Nov. 10, Judge Alonso said.

Although the judge was satisfied with the firm’s accounting for short-term apartment rentals for lawyers attending trial, he wasn’t convinced by Robbins Geller’s reasoning behind their request for hotel expenses.

The detailed travel report is full of hotel stays in excess of $300 per night, with a fair number between $400 and $600, going back more than a decade, the judge said, calling such rates unreasonable and finding that the firm failed to provide any information about what kinds of hotel expenses had been awarded in similar cases.

Without supporting arguments or documents, Judge Alonso said that he would not award any hotel expenses for nightly rates that exceed whatever the federal per diem lodging rate was at the time of stay for that location.  According to the General Services Administration, the current rate for Chicago is about $200 per night.  If Robbins Geller wants to recover hotel expenses at that rate, it will have to make the appropriate calculations and resubmit its request, while also separating short-term rental expenses the judge said.

As for transportation, the firm reduced first-class airfares for case-related travel to the price of coach tickets at the time the passes were purchased, a decision that Judge Alonso agreed with.  But the firm grouped airfare with ground transportation into a single category with no information about what the ground transportation was, he said.  If Robbins Geller wants to recover those costs, it will need to separate air and ground travel and provide more information about what the latter was comprised of.

Judge Alonso also found that several meals were in excess of $50 and many cost more than $40 per person.  Individual meals are noted, but it’s not clear whether they were breakfasts, lunches or dinners, and some were for the “trial team,” where the cost per person can’t be determined, he said.

He refused to reimburse for the “trial team” meals and said that without any argument in support of the requested amounts, he wouldn’t allow any more than $17 per breakfast, $18 per lunch and $34 per dinner, for a total of $74 per day, which are the current rates for meals in Chicago.

The long-running case began in 2002, when the investors claimed that Household International, which HSBC acquired in 2003, and three of Household International’s former top executives lied about the company’s lending practices, financial accounting and loan quality.

The deception forced the company to restate nine years' worth of earnings to reflect that the company had overstated its revenue by $386 million in the course of those years, the complaint said.

The shareholders won a jury verdict in 2009, and the judge hit the bank with a hefty judgment in 2013, but the Seventh Circuit last year reversed the partial final judgment and sent the case back for a new trial.

The settlement came on the eve of the second trial, which Robbins Geller’s Michael Dowd said would only add more costs for the class and had an uncertain outcome.

The case is Lawrence E. Jaffe Pension Plan et al., v. Household International Inc. et al., case number 1:02-cv-05893, in the U.S. District Court for the Northern District of Illinois.