A recent Law 360 story by Dorothy Atkins, “Judge Won’t OK Atty Fees She Says Equal $7,500 An Hour” reports that a California judge issued a tentative ruling approving Merrill Lynch's $12.5 million wage and hour deal but rejected class counsel's $3.75 million fee bid, saying the case "was not particularly complicated" and their requested award would come out to $7,500 per billable hour. Alameda Superior Court Judge Winifred Y. Smith said she would only approve an attorney fee award of $1.25 million, which she acknowledged is "substantially less" than the requested fee bid and represents only 10% of the total settlement.
The judge reasoned that although there's "ample authority" to support a 30% benchmark for awarding fees, when she considers the number of hours that the class attorneys spent on the case and the case's complexity, a lower fee award is warranted. Class counsel has told the judge they expect to have spent a total of 860 hours on the case by the end of it, but the judge wrote in her tentative ruling that it's more likely they will "reasonably" have spent only 500 hours working on the case.
Judge Smith added that if she were to award $3.75 million in fees, then class counsel would receive $7,500 per hour for their 500 hours of work, or at least $4,360 per hour based on their asserted 860 hours of work. "The court will not award windfall fees at exorbitant implied hourly rates of over $4,000/hour (accepting the asserted 860 hours) or over $7,000/hour (the 500 reasonable hours)," the opinion says.
If approved, the settlement would resolve a lawsuit that Marc D. Lowe initially filed in May 2018 and amended the following September, adding Kevin McGuan as a named plaintiff. The latest rendition of the complaint asserts six causes of action, accusing Bank of America NA's investing and wealth management division of committing a host of state labor statute violations, including failing to reimburse financial advisers for their business expenses, failing to provide accurate wage statements, and failure to pay all wages owed.
Merrill Lynch denied the allegations, but before a dispositive motion was filed, the parties entered mediation and informed the court in October 2019 that they had reached a settlement. Under the proposed deal, roughly 1,500 class members would receive an average of $5,738, while attorneys would seek up to $3.75 million, or 30% of the settlement, in fees and up to $35,000 in costs. McGuan and Lowe would also receive a service award of $25,000 each.