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Category: Expenses / Costs

Attorneys Awarded $300M in Fees in Forex Price Fixing Settlement

November 8, 2018

A recent New York Law Journal story by Colby Hamilton, “Attorneys Awarded $300M in Fees in Bank Exchange Fee Settlement” reports that U.S. District Judge Lorna Schofield of the Southern District of New York knocked more than three-and-a-half percentage points off the requested attorney fees in the blockbuster $2.3 billion settlement over price-fixing by banks in the foreign exchange market, but that still left the lawyers for the 15 consolidated cases with more than $300 million in approved fees.  As the court noted, the litigation involved several hundred attorneys working over the course five years, resulting in what the plaintiffs claim is the third largest antitrust class action settlement in history.

Class counsel, led by co-lead counsel from Scott + Scott and Hausfeld LLP, were already awarded $22.5 million for litigation expenses.  Schofield granted counsel 13 percent of the settlement fund for attorney fees—which was less than the 16.51 percent sought.  Schofield noted that two class members objected to the proposed fee as being “grossly excessive,” while requesting a fee of no more than 8 percent.  Schofield found that the experts presented by the plaintiffs ultimately showed that comparable settlements of such size had a regressive percentage attached to them, noting that a pair of settlements that exceeded $3 billion had the smallest fee percentages, under 10 percent.

In looking at risk, results and policy consideration, the judge also found that “nothing in the record … indicates that this case is exceptional” when compared with similar cases.  Notably, Schofield pointed to government investigations and criminal prosecutions relating to price-fixing in the foreign exchange market that laid substantial groundwork ahead of the litigation.  Finally, Schofield’s cross-check against the lodestar multiplier, which she said stood at 1.72 and was “within the typical range for megafund cases.”

Nevada High Court Upholds Gordon & Rees Win in Fee Dispute Case

November 2, 2018

A recent Law 360 story by Aebra Coe, “Nevada High Court Affirms Gordon & Rees Win in Fee Dispute” reports that the Nevada Supreme Court has upheld a jury verdict awarding Gordon & Rees LLP more than $250,000 in a fight with a former radio station client over thousands in unpaid legal fees.  The state's highest court affirmed a unanimous verdict in favor of Gordon & Rees in its battle to ward off a legal malpractice counterclaim and recoup $106,500 in unpaid legal fees as well as other litigation expenses totaling $251,600 from its former client, Edward Stolz, who owns several radio stations and other businesses.  It is believed to be the first time in Nevada a court has awarded fees and costs to a self-represented litigant. 

The court rejected Stolz’s assertion that the lower court should have applied California, not Nevada, law because the underlying lawsuit — in which Stolz was accused of not paying for the rights to the music his radio stations broadcasted — was filed in California and because Gordon & Rees is headquartered in the state.

Instead, the appeals court agreed with the law firm’s assertion that Nevada law applies because several of Stolz’s businesses are in the state, because his initial consultation was in the Las Vegas office of the firm with a Nevada bar-licensed attorney, and because it was in the state that the conduct Stolz takes issue with occurred.

The legal malpractice counterclaims stem from Stolz’s allegation that Gordon & Rees failed to disclose to him, in writing, that it represented his insurer and thus could not represent him in the lawsuit over his radio stations’ use of music if the insurer, Hartford, refused to assume his defense in the lawsuit, which it did.  Instead, that information was conveyed verbally, according to court documents.

“We conclude that the district court correctly applied Nevada law. The incident in question — whether Gordon & Rees should have disclosed the Hartford conflict in writing before representing Stolz — occurred in Nevada.  The fee agreement, in fact, was signed by the managing partner in Gordon & Rees's Las Vegas office,” the high court’s opinion said.  Additionally, the appeals court found that the lower court did the right thing when it awarded Gordon & Rees attorneys' fees and costs in the case, despite the fact that the law firm represented itself, something that is often a disqualifying factor for obtaining fees and costs in Nevada.

The reason the court came to that conclusion is because Stolz signed a contract with the firm stating outright that Gordon & Rees could collect fees and costs if litigation were to occur over its representation of the business owner.  “Here, the district court found that there was a contract between the Stolz companies and Gordon & Rees providing that Gordon & Rees could obtain attorney fees in the event there was a dispute to enforce the agreement.  Thus, the district court awarded fees because Stolz agreed to pay those fees, even if Gordon & Rees was representing itself," the opinion said.

The cases are Royce International Broadcasting Corp. et al. v. Gordon & Rees LLP, case numbers 72148 and 74272, in the Supreme Court of the State of Nevada.

Attorneys Seek $13.5M in Fees in Grupo Mexico-Southern Copper Deal

November 1, 2018

A recent Law 360 story by Rose Krebs, “Attys Seek $13.5M in Fees in Grupo Mexico-Southern Copper Deal” reports that Andrews & Springer LLC and Friedman Oster & Teitel PLLC are seeking $13.5 million in fees for brokering a proposed $50 million settlement for Southern Copper Corp. shareholders in their Delaware Chancery Court suit against Grupo Mexico SAB that claimed the Mexican mining giant improperly bought control of two Southern Copper-related power plants.  The firms filed a motion with the court to approve the proposed settlement, award the attorneys’ fees — amounting to 27 percent of the settlement amount — and grant shareholder Carla Lacey a $5,000 incentive fee for bringing the suit on behalf of the proposed class of stockholders.

In December 2015, Lacey filed the proposed class action and derivative suit contending that Grupo Mexico and some of its directors breached their fiduciary duty and failed to seek a required independent review before structuring a deal to pay far less than Southern Copper's initial $350 million cost for the two plants that supplied power to Southern Copper's Mexican operations.  The suit also contended some Southern Copper directors failed in their duties to prevent “serial abuses of power” by Grupo Mexico.  Grupo Mexico, as controlling stockholder of Southern Copper, had exploited its control by causing Southern Copper to "assume meaningful risk" in connection with the construction of the power plants, the investor asserted.

Also, Grupo Mexico's debt expenses for the power plants were improperly tied to future profits from a 20-year agreement to supply electricity to Southern Copper's Mexican facilities as well as possible third parties, the suit said.  Those terms assured that Grupo Mexico would incur little risk and a prospect of "hundreds of millions, or even billions, of dollars in revenue" at the expense of Southern Copper, the shareholder complaint said.  In August, the parties entered into the $50 million settlement to “eliminate the distraction, burden, delay and expense of further litigation" and provide benefits to shareholders in the proposed class, the settlement said.

A hearing to consider approval of the settlement and to certify the proposed class consisting of holders of Southern Copper stock issued from March 2012 to December 2015, excluding those with ties to the director defendants or any entity Grupo Mexico or its subsidiary had a controlling interest in, is scheduled for Nov. 27, according to court documents.  The hearing will also address awarding the attorneys’ fees.  A brief the firms filed in support of the motion to award the fees was filed under seal.

According to affidavits filed with the court, Andrews & Springer spent roughly 4,200 hours at an estimated cost of about $1.9 million on the case while Friedman Oster & Tejtel worked about 4,500 hours at a cost of about $2.6 million.  Also, Andrews & Springer incurred about $154,000 in unreimbursed expenses such as filings, copying and experts fees while Friedman Oster & Tejtel had about $105,000 in unreimbursed costs, according to the affidavits.

Under the proposed settlement, Grupo Mexico or its wholly owned subsidiary Americas Mining Corp. will pay Southern Copper $50 million within 10 days of final approval by the court.  Southern Copper will then distribute the money to stockholders in the proposed class proportionally based on ownership.

The case is Lacey v. Mota-Velasco et al., case number 11779, in the Court of Chancery of the State of Delaware.

Class Counsel Earn $63M in Attorney Fees in Libor MDL

October 31, 2018

A recent Law 360 story by Michael Macagnone, “Hausfeld, Susman Win $63M in Attys’ Fees in Libor MDL” reports that Susman Godfrey LLP and Hausfeld LLP won nearly $63 million in attorneys' fees out of a $340 million settlement resolving allegations in multidistrict litigation that Deutsche Bank AG and HSBC Inc. were involved in a scheme to manipulate the London Interbank Offered Rate for short-term loans.  The $62.8 million in fees, which according to U.S. District Judge Naomi Reice Buchwald’s order come from the settlement amount, are to be distributed by Susman and Hausfeld, the two primary firms representing the class of over-the-counter investors who were exposed to the allegedly doctored Libor rate outside of a stock exchange.  The order came a day after Judge Buchwald signed off on the $100 million HSBC agreement and $240 million Deutsche Bank agreement with the class.

Judge Buchwald’s order granted the requested fees without change from an August motion, along with more than $600,000 in reimbursement for expenses.  In an August memorandum supporting the proposed fees, the attorneys argued they have so far won more than $500 million in settlements for their clients from various banks in the alleged scheme and the fee amounted to less than 20 percent of the latest settlement.  The MDL is on remand from the Second Circuit, which reversed Judge Buchwald’s 2013 ruling that the plaintiffs had not experienced an antitrust injury since the Libor-setting process was not supposed to be about competition in the first place.

Judge Buchwald granted class certification to the over-the-counter plaintiffs, such as the city of Baltimore, in late February, finding that investors between 2007 and 2010 made similar claims about Libor suppression and other common issues.  The class struck the deal with Deutsche Bank around the same time.  The deal with HSBC followed in March.  Judge Buchwald had indicated approval for attorneys' fees and expenses totaling 18.5 percent, or $63.3 million.

The first bank to settle in the MDL was Barclays Bank PLC, which struck a $120 million agreement in 2016.  Citigroup Inc. reached a $130 million settlement in 2017.  In those deals, attorneys got a combined $58.4 million in attorneys' fees and expenses after reducing their request from Barclays.  The same four banks have also settled, in a separate $152 million deal, MDL claims that their Libor manipulation hurt exchange-based investors.

The case is In Re: Libor-Based Financial Instruments Antitrust Litigation, case number 1:11-md-02262, in the U.S. District Court for the Southern District of New York.

Duane Morris Wins Share of Fee Award in Auto Parts MDL

October 30, 2018

A recent Law 360 story by Anne Cullen, “Duane Morris Win $850K in Cut on $3.1M Auto Parts MDL” reports that Duane Morris LLP saw a fee request granted by the Michigan federal judge overseeing multidistrict litigation (MDL) surrounding an alleged conspiracy to stifle competition in the auto parts industry, scoring just under $850,000 from a $3.1 million deal cut with Robert Bosch GmbH and others.  In a four-page order, U.S. District Judge Marianne O. Battani approved Duane Morris’ bid for nearly a third of the multimillion-dollar deal, which Bosch, Mitsuba Corp. T. RAD Co. Ltd. And Hitachi Automotive Systems Ltd. agreed to pay to settle truck dealerships’ claims the companies conspired to maintain inflated prices on starters, alternators and radiators.

The decision lets the firm pocket a little more than $847,000 — which amounts to 30 percent of what's left in the settlement pool after $246,000 is deducted to cover settlement costs — plus another $33,000 to cover expenses.  It also pushes the firm’s total fee award within the starter, alternator and radiator track of the MDL to $1.17 million, after Duane Morris won $325,000 fees in June as part of a 1.3 million deal with Mitsubishi.  Judge Battani preliminarily signed off on the settlement with Bosch and the three other companies in August, and logged her final blessing for the deal alongside the fee approval.

The settlement stipulates that T. RAD and Hitachi will each pony up about a million dollars, and Bosch and Mitsuba split the remainder.  Case filings indicate the settlement will cover more than 1,000 estimated members of a class that primarily involves dealers of medium- and heavy-duty trucks as well as forestry and construction equipment that indirectly purchased starters, alternators or radiators since 2000.

Another multimillion-dollar deal within the sprawling MDL moved forward when Judge Battani gave Toyoda Gosei Co. Ltd.  The initial go-ahead on its $10.8 million deal with auto dealerships over occupant safety systems, constant velocity joint boot products, automotive hoses, body sealing products, interior trim products and brake hoses.  The expansive litigation began after a U.S. Department of Justice investigation into the alleged scheme in 2011, and has already cost companies within the industry more than $2.5 billion in fines.

In 2017, the firm nabbed two fee awards within the automotive bearings track — $1.3 million in November and up to $2.8 million in April — as well as a $1.5 million award in 2016 for litigation surrounding wire harnesses and occupant safety systems.

The case is Rush Truck Centers of Alabama Inc. et al v. Mitsubishi Electric Corp. et al., case number 2:15-cv-14096, in U.S. District Court for the Eastern District of Michigan.  The MDL is In re: Automotive Parts Antitrust Litigation, case number 2:12-md-02311, in the U.S. District Court for the Eastern District of Michigan.