A recent Texas Lawyer story, “Approving Big New Corp. Settlement, US Judge Cuts Class Attorney Fee Request by One-Third,” reports that, while describing their work on the case as "extraordinary," a New York federal judge nevertheless chopped a $73 million attorneys fee award sought by five law firms in the case by one-third in a recent order approving a $224 million settlement of a class action lawsuit against News Corp.
The law firms, Washington, D.C.'s Kellogg, Huber, Hansen, Todd, Evans & Figel, two Texas-based firms—Susman Godfrey and McKool Smith—New York's Kramer Levin Naftalis & Frankel, and Washington, D.C., lawyer R. Stephen Berry of Berry Law, represented a class of plaintiff consumer goods firms who sued News Corp. in an antitrust action.
The plaintiffs alleged in Dial Corp. v. News Corp. that News Corp. acquired and maintained a monopoly on in-store retail promotion services, such as shelf signs and floor decals, and engaged in anti-competitive conduct. The parties reached a proposed $224 million settlement of the case earlier this year.
In his Oct. 31 order, U.S. District Judge William H. Pauley III noted that the settlement amount for such a complex case was reasonable, fair and adequate. When turning to examine whether the class counsel deserved a requested 30 percent of the settlement, Pauley noted that "counsel collectively billed a staggering 69,128.95 hours—which equates to 35 billable years by 'Big Law' standards," he wrote.
But Pauley also noted that the law firms handled a "breathtaking" 11 million documents in discovery review and that the time and labor that went into the case was "extraordinary."
"Plaintiffs were represented by some of the finest antitrust lawyers in the nation," Pauley noted in his order. "Counsel tirelessly litigated this case against defendants' lawyers, who were equally high caliber.
"But this court would be remiss if it did not highlight the fact that the time and labor expended by the five law firms—three more than this court appointed—most certainly led to a duplication of efforts," Pauley wrote of the class counsel in the case.
Pauley was concerned that the five firms "staffed nine partners, nine associates, five staff attorneys, and few paralegals who spent over 1,900 hours" briefing the class certification motion, "leaving this court wondering why so many attorneys—let alone partners—were staffed on the task."
Ultimately, Pauley awarded the five law firms $48,825,000 million, or 66.8 percent of the fees they requested.
Jim Southwick, a partner in Susman Godfrey and one of the plaintiffs' counsel, said he agrees with Pauley's superlatives about the complexity of the case and the good result the class lawyers got for their clients.
"He says that the case was exceptionally complex and I agree with that. He says it's an outstanding result for the class and I agree with that. He says we're some of the finest antitrust lawyers in the nation and I'm don't disagree with that," Southwick said.
"As to his order on the fees, my only comment on that is the lawyers worked very hard to get the best possible result for the class," Southwick said. "But in a class action the judge has the last word on the fees.''
Lewis LeClair, a principal in McKool Smith who serves as class counsel, wasn't surprised that Pauley reduced the requested attorney fees given that so many lawyers worked on the case.
"I like Judge Pauley a lot. His decisions were always thoughtful and good," LeClair said. "And the reality was that this was a contingent case and we looked at it as a fee recovery, because that's the way in the Second Circuit.
"The judge was correct, there were a lot of lawyers that worked on this case and we were scared to death that we were going to lose that ruling," LeClair said of class certification. "But we got a fair result for the clients and I'm happy."