A recent Law 360 story by Morgan Conley, “2nd Circ. Affirms $15M Fee Award for Dam Breach Deal Attys,” reports that the Second Circuit ruled attorneys from Robbins Geller Rudman & Dowd LLP and Pomerantz LLP earned their $15 million cut of a $50 million deal between investors and mining giant BHP Billiton Ltd. despite an objector’s argument they were overpaid.
In a unanimous summary order, a three-judge panel found the lower court did not err when it approved the attorneys receiving 30% of the $50 million fund they secured for investors in a consolidated suit alleging BHP lied to investors about lax safety standards at a Brazilian processing facility prior to a massive dam breach. The panel shut down claims from investor John W. Davis, a regular class action objector, that the attorneys were unfairly paid at a “roughly 172% premium” on top of their usual hourly rates.
The court explained that plaintiffs’ counsel spent more than 10,000 hours working on the case, which it described as having “a complicated procedural and factual history, difficult legal issues, and a settlement amount that was statistically above- average.” “On this record, we cannot say that the district court exceeded its considerable discretion in awarding attorneys’ fees,” the court said.
Davis had contended the attorneys' normal hourly rate of between $400 and $1,030 would have been sufficient but that the New York district court wrongfully applied a 2.72 multiplier to raise the payment window to $1,088 and $2,800. The panel said a lodestar multiplier is appropriate when attorney fees are being paid from a common fund. Davis also alleged the lower court did not adequately defend its reasoning for the fee award. The court again disagreed, citing evidence in the record of how much work went into the case.