A recent Reuters Legal story, “Preview: Lawyers to Defend Fee Award by Delaware Judge,” reports that a team of plaintiffs’ attorneys will defend their $304 million attorney fee award before Delaware’s Supreme Court in a case that put the spotlight on the new chief judge on the state’s high-profile business court. The attorney fees stems from a $2.03 billion judgment awarded by Delaware Chancery Court Judge Leo Strine in October in a case brought by shareholders of Southern Copper Corp, who accused the company of overpaying in a takeover.
The two law firms, Kessler Topaz Meltzer & Check and Prickett Jones & Elliott, logged 8,597 hours on the case, which was spread among 45 lawyers and paralegals, according to court records. The attorney fees, if award by the lodestar calculation, instead of the percentage of fund (POF) method, would amount to $35,000 per hour. By comparison, the plaintiffs’ legal team that recovered $3.2 billion for Tyco shareholders spent 488,000 hours on the case, according to a brief on Southern Copper, receiving $1,010 per hour.
Judge Leo Strine amended his original judgment a few days after awarding the fees, and as a result the fee award was increased to $304 million from $285 million. Stine said the payment was based on the size of the recovery and was meant to encourage entrepreneurial plaintiffs’ attorneys. The judgment and the fees were stayed pending appeal, although the judgment will accrue interest.
“The message I think he is sending is that if you have a meritorious case and your lawyers add true value to the shareholders you will be appropriately rewarded,” said John Coffey, a former plaintiff’s lawyer who is a managing director with BlackRobe Capital Partners, which advises investors in legal claims. “I would be surprised if the Supreme Court disagreed with his basic premise,” Coffey said, though he said the fees could be trimmed on appeal.