A recent Law 360 story by Michael Angell, “Neuberger Workers’ Attys Get $4.8M in Fees in ERISA Deal,” reports that attorneys for a class of Neuberger Berman employees got the green light from a New York federal judge to collect $4.76 million in attorney fees for their work securing a $17 million settlement resolving claims that the investment giant put workers' retirement money into an underperforming fund.
U.S. District Judge Laura Taylor Swain approved the fee request from attorneys for Arthur Bekker, who sued Neuberger Berman for breach of fiduciary duty for offering him and others a laggard, in-house mutual fund in their 401(k) plans. Judge Swain said the fees, which were lower than those earlier requested, were merited in a long-running, difficult case.
"Class counsel has pursued this matter since 2016 — over four years of research, investigation, briefing and settlement efforts. ... Class counsel were efficient and effective in securing this result for their client and the class," Judge Swain said in her order. Bekker's attorneys secured $17 million for the class in June from the Employee Retirement Income Security Act suit.
Judge Swain said Bekker's representatives were able to get the award in the face of significant risks in bringing ERISA 401(k) actions, especially the risk of taking on a lengthy, complex case with the potential of zero recovery for their clients and themselves.
Judge Swain noted that Bekker's fiduciary breach claim was initially dismissed, prior to her reviving it in May 2019. She also said the U.S. Supreme Court's February decision in Intel Corp. Investment Policy Committee et al. v. Christopher M. Sulyma, which established deadlines on when workers can file ERISA actions, could have time-barred Bekker's suit.
"Class counsel were able to leverage their expertise and experience with similar matters to achieve a positive, lasting and meaningful benefit to the class in this complex case," Judge Swain said in her order. The fees request, which works out to 28% of the total award, is a discount relative to other awards in ERISA 401(K) cases across the country, which are typically one-third of the total award, Judge Swain said in her order.
The percentage-of-award calculation for fees is preferred in the Second Circuit over using an hourly rate multiplied by the number of hours worked on a case, according to her order. But even based on an hourly rate method, the fees request seems reasonable, Judge Swain's order said. Bekker's attorneys put in 1,386.5 hours of work on the case, which works out to $813,410 in "lodestar" fees earned for their time, Judge Bekker's order said. The fees request amounts to a lodestar multiplier of 5.85, which is on par with other fees requests, she added.
Bekker's attorneys requested they be given 28% of the award in October, saying that the percentage requested reflects the median amount given in 137 other ERISA cases from 1997 through 2013. That request amounted to roughly $1 million less than they originally asked for. However, Judge Bekker noted that the fee was not so low that it would disincentivize other attorneys from bringing forward similar complaints. In addition to the fees, Bekker's attorneys will be reimbursed for $41,083 in expenses, and he will receive $20,000 for serving as lead plaintiff.