August 21, 2023
A recent Law 360 story by Bonnie Eslinger, “Wells Fargo Investors’ Attys Get $75M As Insurance Deal OK’d”, reports that a California federal judge granted final approval at a hearing to a $300 million settlement resolving investor claims that they were harmed when Wells Fargo allegedly hid misconduct in its auto insurance practices, including $75 million in fees for the plaintiffs' attorneys. At the start of the hearing, a lawyer for the investors called the deal "a tremendous settlement for the class." Scott Saham of Robbins Geller Rudman & Dowd LLP also noted there was "not a single objection": not to the settlement and not to the fee request.
U.S. District Judge James Donato asked if anyone had opted out of the deal. The plaintiffs' lawyer said about 1.1 million notices were sent out to potential class members and nominees, and there were only 76 opt-outs representing about 600 shares, a "tiny fraction" of the overall total. The judge also wanted to know what percentage of shareholders had filed claims so far.
Saham noted the deadline for claims to be filed was still four days away, and that typically a large majority of claims, including those from institutional investors, come in on the last day. Saham told the judge he was "confident" the claims rate "will be in excess of 80%."
Before signing off on the deal, Judge Donato said he had been "concerned" about the one-quarter cut of the settlement that the lawyers for the class were seeking, but said he also recalled there were significant challenges for the plaintiffs, including a big fight over documents the bank said were protected by attorney-client privilege. "So 25% it is," Judge Donato said.
The motion for the fee award states that counsel's lodestar — derived by multiplying the hours spent on the action by each attorney and litigation professional at their hourly rates — added up to $29,516,213. "The requested fee of 25% represents a multiplier of 2.5 on the lodestar," the motion says, adding, "which is comfortably within the range of lodestar multipliers courts in this Circuit regularly approve."