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Category: Fee Award

Attorneys Earn $71M in Fees in $1B Surfside Settlement

August 29, 2022

A recent Law 360 story by Carolina Bolado, “Attorneys Get $71M in Fees For $1B Surfside Settlement Work” reports that the judge overseeing the consolidated litigation over the collapse of the Champlain Towers South condominium in Surfside, Florida, approved about $71 million in attorney fees for class counsel who secured a global settlement of more than $1 billion for the victims.  In a hearing, Miami-Dade Circuit Judge Michael Hanzman said he would award $65 million in attorney fees for work by counsel in bringing the case to a close about a year after the collapse of the beachfront condominium tower on June 24, which killed 98 people.

He added $6.5 million in fees for work attorneys have performed in recent weeks guiding victims' families through the now-completed claims process.  Coupled with the $5.65 million Judge Hanzman awarded to court-appointed receiver Michael Goldberg and the three firms that represented him — Akerman LLP, Berger Singerman LLP and Boyle Leonard & Anderson PA — for their work handling the receivership of the condominium association, the total fees amount to about $77 million.

The judge noted that amount is between 6% and 7% of the total $1.2 billion recovery obtained for victims of the collapse, far less than what victims would have had to pay had they retained counsel and litigated claims on their own.  Judge Hanzman commended the attorneys, who worked the complicated case "in a glass house and under extreme pressure."  He said they signed on at the beginning of the case, when expected recovery was $200 million to $300 million and the court had warned them not to expect any fees.

"This case could've been a disaster for them," the judge said.  "There was so much potential to go off the rails.  They could've been stuck in a decade-long slog with no compensation."  Class counsel had requested a lodestar fee amount of about $22 million, multiplied by 4.5 to get to just over $100 million.  The judge agreed a multiplier was warranted, given the extraordinary result, but he was unwilling to go that high.

At the hearing, co-lead counsel Harley Tropin of Kozyak Tropin & Throckmorton, told Judge Hanzman that "whatever you award us is good with us."  "We had one goal: Recover as much money as we could," Tropin said.  "I hope you think we did a good job. Whatever you award us, we're good."

Following the hearing, Tropin and co-lead counsel Rachel Furst of Grossman Roth Yaffa Cohen PA said in a statement that they were "grateful to have had the opportunity to represent the victims and serve the court."  "We are grateful for the recognition of our work in the form of this fee award and for having this brought this case to a conclusion for the victims," they said.

The funds going out to the victims will come from the $1 billion from a global settlement with a number of parties, insurance proceeds from the condominium association's policies, and $120 million from the sale of the property to Dubai, United Arab Emirates-based buyer Damac Properties PJSC.

Chancery Approves $75M Fee Award in Williams Merger Dispute

August 29, 2022

A recent Law 360 story by Jeff Montgomery, “Chancery Oks $75M Cravath Fee in Williams Merger Dispute” reports that Cravath Swaine & Moore LLP nailed a nearly $75 million fee after a Delaware vice chancellor upheld its 15% contingent pay agreement with The Williams Cos. during much of a long battle with Energy Transfer LP and its affiliates over a $410 million deal-termination damage claim.

Vice Chancellor Sam Glasscock III also upheld a provision of the agreement that shifted Cravath's fees to Energy Transfer — the losing side of a $410 million battle with Williams over a termination fee triggered when Williams abandoned an earlier deal with one of its affiliates to pursue an eventually doomed, $38 billion Energy Transfer merger.

Energy Transfer, already required to pay Williams' $410 million break fee, fought the reasonableness of Cravath's fee, the 15% contingent arrangement as well as the court's decision to allow quarterly compounding interest for the fee, including a multiyear span while the case was stayed.  According to the decision and a transcript of earlier arguments on the dispute, Cravath's average or "lodestar" rate was $47.1 million for the same hours, compared with $74.8 million under the contingent fee arrangement.

"It is worth pointing out that these sophisticated parties surely were aware that post-merger-agreement litigation, seeking a break fee, could likely include representation on a contingent basis." the vice chancellor wrote in a decision that upheld the Williams side on all points.  Energy Transfer "had every opportunity, therefore, to contract against use of a contingent fee to determine the amount of fees shifted, if they so desired. This they failed to do," the vice chancellor wrote.

"The merger agreement contains no limitation on what kinds of attorneys' fees and expenses may be shifted to the losing party, other than a requirement, which is already implied under Delaware law, that the shifted fees and expenses must be 'reasonable,'" the vice chancellor wrote.  Williams had argued that a new general counsel secured the contingent agreement with Cravath in mid-2017, after Delaware's Supreme Court let stand the vice chancellor's finding that failure of a required tax-treatment for the $1.38 billion merger allowed Energy Transfer to walk away.

Energy Transfer argued that interest should have been suspended during a two-year period between 2019 and 2021 when a Williams' discovery vendor's error brought litigation to a halt. They also argued that litigation time over the interest rate and fees should likewise not count.

The decision also provided for interest at 3.5%, compounded quarterly, with the court observing other decisions that found compound interest "the standard form of interest in the financial market."  In all, according to a court brief filed, Cravath earned $4,358,372.70 prior to the start of the contingent fee terms, $4 million under a contractual fixed fee and $74,846,161 under the contingent fee.

Court Cuts Attorney Fees in $180M First Energy Class Settlement

August 23, 2022

A recent Law 360 story by Hannah Albarazi, “FirstEnergy Investors Get $180M OK’d, But Atty Fees Cut” reports that an Ohio federal judge gave final approval to FirstEnergy Corp.'s $180 million settlement with investors who brought derivative suits over a bribery scandal embroiling the electric utility company and the state legislature, while reducing the attorney fees in the case by more than $12 million.  U.S. District Judge Algenon L. Marbley lowered the plaintiffs' attorney fees from the roughly $48.6 million they requested to $36 million and granted final approval to the $180 million settlement, ending shareholder derivative actions over the so-called HB6 scandal and clearing the path for a slate of corporate governance reforms to begin.

The granted attorney fees represent 20% of the settlement pot, as opposed to the 27% that plaintiffs' counsel requested.  The judge said he extensively deliberated about the factors that went into the fee award and said the figure he arrived at "appropriately accounts for counsel's labor, risks and results" in the case.  Among other things, he noted a lack of depositions that "would have demanded more intensive labor and, thus, greater risks under the contingent fee arrangement" and a "recognition of the advantages to 'coattailing' a major government investigation."

"If FirstEnergy cannot be made perfectly whole in monetary terms, then the next-best outcome is to repair its reputation with prompt, forward-looking reforms designed to prevent a recurrence of the alleged conduct.  The proposed settlement meets that mark," Judge Marbley further wrote in his order.  He noted that this settlement captures about 82% of the available insurance coverage, which is the main source of recoverable assets.

The lawsuits consolidated in the Southern District of Ohio revolved around a scheme by FirstEnergy to bribe then-Ohio House Speaker Larry Householder in order to receive a $1.3 billion bailout of its nuclear power plants.  The company admitted in July 2021 to paying the bribe and paid a $230 million penalty to escape prosecution.

U.S. District Judge John Adams, who is overseeing the case in the Northern District of Ohio, has spoken out against the settlement in the Southern District of Ohio, accusing the parties of forum shopping in order to find a court more favorable to the proposal than his.  Judge Adams has refused to dismiss the case before him and has called for the appointment of new lawyers to oversee that case.

But a special litigation committee composed of independent directors of FirstEnergy objected to the attorney fees, arguing that the plaintiffs weren't alone in working to improve the company. The committee told the court that it helped institute some of the corporate reforms that shareholders' attorneys were trying to take credit for as part of the settlement.

Plaintiffs' counsel have told the court that the settlement — which is funded by the company's insurers — is "among the largest derivative recoveries ever achieved" in the U.S. and is "three times greater than any prior derivative recovery in the history of the Sixth Circuit."

In his order, Judge Marbley didn't get distracted by the record-breaking settlement amount.  "Still, the monetary component of the settlement deserves some scrutiny," he wrote.  "While the recovery is substantial, so too were the harms resulting from the alleged bribery scandal."

Hagens Berman Earn $5.3M in Fees in Sasol Settlement

August 19, 2022

A recent Law 360 story by Emilie Ruscoe, “Hagens Berman Nabs $5.3M in Fees Over Sasol Investor Deal” reports that attorneys who represented investors in South African energy and chemical company Sasol Ltd. will get nearly $5.3 million for their work on the case after brokering a $24 million settlement deal with the company to end claims it hid risks taken as it built a facility in Louisiana.  In an order, U.S. District Judge John P. Cronan said the investors' Hagens Berman Sobol Shapiro LLP legal team could have 22% of the settlement fund and nearly $432,000 to cover their litigation expenses. Together, the attorney fee and the reimbursement sum total over $5.7 million.

"Lead counsel conducted the litigation and achieved the settlement with skill, perseverance, and diligent advocacy," the order states, adding later that the fee and reimbursement sums are "consistent with awards in similar cases."  Judge Cronan also said lead plaintiff David Cohn could have $20,000 and additional plaintiff Chad Lindsey Moshell could have $15,000 from the settlement fund to reimburse their "reasonable costs and expenses directly related" to the litigation.

The court's order comes a day after a final hearing on the proposed fee and reimbursement sums and adopts language proposed by the investors in July, when they filed the request for the attorney fees.  The order also noted that none of the members of the class had objected to the settlement sum, despite the fact that nearly 90,000 potential class members had been mailed notices about the final hearing, and that the attorneys spent an estimated 6,000 hours on the case since moving to become lead counsel in the matter in April 2020.

$627M in Attorney Fees in BCBS MDL

August 9, 2022

A recent Law 360 story by Jack Karp, “Boies Schiller, Hausfeld Score $627M in Fees in BCBS MDL” reports that an Alabama federal judge awarded $626.6 million in attorney fees and another $40.9 million in costs on Tuesday to Boies Schiller Flexner LLP, Hausfeld LLP and other lawyers who scored a $2.67 billion class award for subscribers in multidistrict litigation against Blue Cross Blue Shield insurers.

The fees represent 23.47% of the $2.67 billion settlement fund, which U.S. District Judge R. David Proctor said falls within the lower half of the Eleventh Circuit's "benchmark range" of 20% to 30%. He also gave final approval to the settlement itself Tuesday.

The fees amount is "fair and reasonable" given the nature of the settlement, according to the judge, who noted that "the settlement also provides historic, transformative, pro-competitive injunctive and equitable relief that will greatly benefit the members of the subscribers class."

"The case presented a myriad of difficult factual issues, requiring substantial discovery to resolve, including the production of millions of pages of documents and the taking of scores of depositions," he added.

The $40.9 million in litigation costs and expenses is also "fair, adequately documented, reasonable," according to the judge.

"As the judge said, it's consistent with awards that have been approved in the Eleventh Circuit, and therefore we met all the factors that the court said needed to be considered," one of the subscribers' lead attorneys, Michael Hausfeld, told Law360 Tuesday.

Attorneys coordinating the defense for the Blue Cross and Blue Shield insurers did not respond to a request for comment.

Hausfeld and David Boies were appointed by Judge Proctor in 2013 to serve as lead counsel for a putative class of plan subscribers.

The nation's BCBS insurers agreed in 2020 to the $2.67 billion class settlement fund and sweeping anticompetitive practice reforms to settle the long-running multidistrict suit based in Alabama federal court that was filed by dozens of subscriber groups.

The multidistrict litigation, opened in January 2013, accused dozens of mostly nonprofit BCBS-affiliated insurers of using trademarking and other practices, including limits on non-Blue revenues to suppress competition. The MDL eventually grew to include more than 40 plaintiffs' groups nationwide.

In addition to the financial award, injunctions proposed under the agreement eliminate a national cap on revenues permitted for the organizations that requires two-thirds of each member plan's national health care-related revenue to come from "Blue-branded" services.

The agreement also eliminates some restraints on acquisitions by BCBS organizations, eliminates some direct-contracting restrictions and limits other practices giving preference to BCBS-related services.

Individuals who opted out of the settlement filed their own suit in Florida federal court in 2021, saying the deal doesn't compensate health plan subscribers enough for the Sherman Act violations they've claimed.

The case is In re: Blue Cross Blue Shield Antitrust Litigation, case number 2:13-cv-20000, in the U.S. District Court for the Northern District of Alabama.