A recent Law.com story by Nadia Dreid, “NY Judge ‘Surprised’ By Fee Application in Libor Rigging Case,” reports that a New York federal judge wasn't happy with the amount of hours or law firms on the attorney fee bill she received in the wake of a $187 million deal with JPMorgan and other major financial institutions over claims of interbank rate rigging, but she granted $45 million in fees anyway. U.S. District Judge Naomi Reice Buchwald said in her opinion that she was "to say the least, surprised to learn from their fee application that [exchange-based plaintiff] class counsel involved twelve additional law firms" and that the work from those firms made up nearly a fifth of the submitted hours.
"The court cannot divine any reason why it was necessary, efficient or in the best interests of the class to have twelve additional law firms litigate this case," the opinion read. "If anything, the hours were claimed for work that was duplicative, unnecessary and easily could have been performed by the two appointed firms."
Those firms were Kirby McInerney LLP and Lovell Stewart Halebian Jacobson LLP, who were appointed as class counsel to the exchange-based plaintiffs in the multidistrict litigation accusing JPMorgan, Deutsche Bank and a handful of other big banks of conspiring to rig the London Interbank Offered Rate, or Libor. Judge Buchwald preliminarily approved the $187 million deal in March and gave it her final blessing in September, but she had yet to come to a final decision on attorney fees. Ultimately, she decided that none of the 15,000 hours of additional work done by outside firms would be used in the lodestar calculations.
The court also had issues with the amount of hours billed by class counsel themselves. Although she agreed to accept all of the more than 65,000 hours of work from the two firms, the court noted that their bill listed 10,000 hours more than their sister counsel claimed "in support of their fee application for a case of similar magnitude." It would take a four-person law firm working on the case full-time for roughly nine years — minus a month annually for vacation — to reach the 65,000 mark, according to the court.
"While the sheer quantum of hours suggests some amount of over-litigation, the court will credit [class counsel] the full amount of time they claim," Judge Buchwald said. The fees that the firms will walk away with comes out to 25% of the $187 million settlement, after the deduction of around $5.6 million in expenses, according to the opinion.