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Clevenger v. Dillards

March 9, 2007


The opinion of the court was delivered by: Chief Judge Sandra S. Beckwith

Magistrate Judge Hogan


Class Counsel has requested an award of attorneys' fees and costs pursuant to the common fund doctrine in the amount of 29% of the Settlement Fund achieved through their efforts in this action.*fn1 For the reasons set forth below and at the February 15, 2007, final fairness hearing, the Court approves Class Counsel's request.

I. Background

This case involves claims that Defendants miscalculated lump sum distributions based on the dates that the distributions were made and that one or more amendments to the Mercantile Stores Pension Plan ("the Plan") resulted in violations of the ERISA rules governing plan terminations, minimum vesting requirements, present value requirements, and/or the obligations imposed on fiduciaries. In addition to facing a difficult legal battle, it was clear that anyone representing Plaintiff would be required to overcome a well-financed adversary and prominent defense counsel with abundant financial and legal resources at their disposal.

The Court's own review of the case confirms that the issues presented were highly complex and required a level of sophistication and expertise in ERISA pension matters that few lawyers possess. The evidence and arguments presented at the final fairness hearing showed that Class Counsel, Mr. Sprong and Mr. Carr, are highly competent pension litigators, and their work in this matter and the result they achieved demonstrates to the Court that they are very experienced in these matters.

As the Court stated at the final approval hearing, the settlement achieved was an excellent result for the Class. The settlement negotiations spanned a considerable length of time and involved numerous in-person meetings, a court-ordered settlement meeting, and two mediation sessions, all of which culminated in the Settlement Agreement reached in June 2006. Lesser offers to settle made by Defendants were rejected by Class Counsel, who chose instead to continue to press on for a greater recovery despite the risk of possibly recovering less or nothing.

In November 2006, Dillard's mailed notice of the proposed settlement and attorneys' fee request to approximately 25,500 Class members. The notice included a Court-ordered procedure by which an individual Class member could object to the fee requested by Class Counsel and required that such objections be filed with the Court by January 15, 2007. Not one Class member objected to the proposed 29% fee award.*fn2

II. Legal Analysis

The United States Supreme Court "has consistently recognized that a litigant or lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole." Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (citations omitted). A common fund award is appropriate when, as in the instant case, "each member of a certified class has an undisputed and mathematically ascertainable claim to part of a lump-sum judgment recovered on his behalf." Id. at 479. As this Court noted in an ERISA class action, the common fund method for awarding attorney's fees applies when the parties have settled the case. Dalesandro v. International Paper Co., No. 1:01-cv-109 (S.D. Ohio) (July 8, 2005 Order, p. 49, citing Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d 513, 516 (6th Cir. 1993). Other circuits that have addressed the issue have concluded that recovery of common fund fees is not precluded where a fee-shifting statute applies. Staton v. Boeing Company, 327 F.3d 938, 967 (9th Cir. 2003)(citing, e.g., Brytus v. Spang & Co., 203 F.3d 238, 246-247 (3d Cir. 2000) (holding that common fund fees can be appropriate in both settled and litigated cases where statutory fees are potentially available); Cook v. Niedert, 142 F.3d 1004 (7th Cir. 1998) (approving fees measured by common fund rather than statutory principles where statutory fees were potentially available); Skelton v. GM Corp., 860 F.2d 250, 256 (7th Cir. 1988) (when a settlement fund is created in exchange for release of the defendant's liability for damages and statutory attorney fees, equitable principles govern the court's award of attorney fees); see also Boeing, supra.

The Sixth Circuit has held that "either the lodestar or percentage of the fund method of calculating attorney's fees is appropriate in common fund cases, and the determination of which method is appropriate in any given case will depend on its circumstances." Rawlings, 9 F.3d at 517; see also Bowling v. Pfizer, Inc., 102 F.3d 777 (6th Cir. 1996). In Rawlings, the Sixth Circuit stated as follows:

We are aware of the recent trend towards adoption of a percentage of the fund method in [common fund] cases. [citations omitted]. Nonetheless, a number of our sister courts of appeals have recognized that the appropriate method for use in common fund cases depends upon the circumstances of each case. [citations omitted]. In this circuit, we require only that awards of attorney's fees by federal courts in common fund cases be reasonable under the circumstances. [citation omitted].

9 F.3d at 516-517.

The Court finds that it is appropriate to award Class Counsel a percentage of recovery fee in this litigation. In determining what constitutes a reasonable and fair percentage, the Court has considered the following factors which the Sixth Circuit has suggested should be taken into account in ascertaining an appropriate percentage award: (1) the value of the benefit rendered to the class; (2) society's stake in rewarding attorneys who produce such benefits; (3) whether the services were undertaken on a contingent fee basis; (4) the value of the services on an hourly basis; (5) the complexity of the litigation; and (6) ...

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