In Re Black Farmers Discrimination Litigation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
in re BLACK FARMERS D;SCRLMINATION ) Mis¢. No. cls-051 1 (PLF)
LITIGATIoN 3
J
orrNioN
This matter is before the Court on class counsel’s updated motion for an award of
attomeys’ fees and expenses The Settlement Agreement that was approved by the Court
following a Fairness Hearing provides that class counsel will receive an award equal to at least
4.1% but no more than 7.4% of the common fund that has been established for the payment of
successful claims in this action. Class counsel, who have devoted an immense number of hours
to this case while incurring many millions of dollars in unreimbursed out-of-pocket expenses,
have moved for an award set at 7.4% of the fund, or $9{),835,000. Having carefully considered
the matter, and for the reasons explained below, the Court will grant class eounsel’s motion for
an award of attorneys’ fees and expenses set at 7.4% of the common fund. Pursuant to the
Settlement Agreement, class counsel will receive their fee award at the same time that successful
claimants are paid on their claims.l
1 "[``he papers considered by the Court in connection with this matter include the
following Updated l\/lotion by Class Counsel for Award of Attorneys’ Fecs and Expenses
("l\/lot.") {Dkt. No. 3()6]; Memorandum of Law in Support of Class Counsel’s Updated l\/iotion
for Award of Attorneys’ Fees and Expenses ("Mem.") [Dkt. No. 306~1]; Defendant’s Response
to Class Counsel’s Updated Motion for an Award of Attorneys’ Fees and Expenses ("Opp.")
[Dkt. No. 321]; Reply Brief in Support of Class Counsel’s Updated Motion for Award of
Attorneys’ Fees and Expenses ("Reply") [Dkt. No. 325]', and Supplemental Filing in Support of
Class Counsel’s Motion for an Award of Attorneys’ Fees and Expenses ("Supp. Filing") [Dkt.
No. 368].
The term "common fund," as used here with reference to the fund established in
this case, refers specifically to the "Fee Base" as defined in the Settlement Agreeinerat, which
I. BACKGROUND
On April 14, 1999, this Court entered a Consent Decree in Pigford v. Glickman,
Civil Action No. 97-1978, establishing a non~judicial claims resolution process for a class of
African American farmers who alleged that they had been discriminated against on the basis of
their race by the United States Department of Agriculture ("USDA") in the provision of farm
loans and subsidies and other federal agricultural benefits, and who further alleged that
complaints they lodged about this discrimination were ignored by the USDA. §§ Pigford v.
Glickman, 185 F.R.D. 82 (D.D.C. 1999); § also in re Blacl< Farmers Discr. Litig., 856 F. Supp.
2d l, 7~ll (D.D.C. 2011) (recounting history of the L{igfo;d litigation).
"l``he wlfidg@ Consent Decree represented an important step toward ameliorating a
long legacy of discrimination acknowledged by the USDA itself. But tens of thousands of
prospective claimants were not permitted to participate in the claims resolution process that was
set in motion by the Consent Decree because their claim forms were not timely filed. Under the
terms of the Consent Decree, any claim form that was not postmarked within 180 days of the
entry of the Consent Decree could not be considered on the merits unless the claimant petitioned
for permission to file a late claim and demonstrated that "his failure to submit a timely claim was
due to extraordinary circumstances beyond his control." Pigford v. Glickman, Civil Action No.
97-1978, Consent Decree ll S(g) (D.D.C. Apr. l4, 1999). l\/Iore than 61,000 individuals
petitioned to submit untimely claim packages. Ultimately, only 4% of these "late filers" were
deemed to have shown “extraordinary circumstances" beyond the individual’s control and had
their claims considered on the merits. The remaining “late filers" _ over 58,000 in all - were
comprises the $125 billion appropriated by Congress for this litigation minus $22.5 million in
implementation costs. §§ Settlement Agreenient (Revised and Executed as of May 13, 2011)
§ II.O [Dkt. No. 170-2].
unable to pursue relief under the Consent Decree. § ln re Black Farmers Discr. Litig.,
856 F. Supp. 2d at l 1. Moreover, thousands of additional would-be claimants (the so~called
“late-late tilers") submitted petitions to file untimely claims aj?er' the deadline for such petitions,
and they, too, were denied the opportunity to have their claims adjudicated under the Hg@
Consent Decree. M.
In 2008, after years of lobbying and publicity efforts by advocates for late-filing
»P,i,g,fpwrd claimants, Congress enacted Section 14012 of the Food, Conservation, and Energy Act
of 2008 (the "F arm Bill"), which provided that "[a]ny Pigford claimant who has not previously
obtained a determination on the merits of a Pigford claim may, in a civil action brought in the
United States District Court for the District of Columbia, obtain that deterrnination." PUB. L.
NO. 110~246, § l40l2(b), 122 Stat. 1651 (2008). Section 14012 authorized forms of
adjudication that were "similar, but not identical," to the two-track adjudication system
established under the Consent Decree. In re Black Farmers Discr. Litig., 856 F. Supp. 2d
at l2. Among the most noteworthy differences, Section 14012 made no provision for a non-
judicial claims resolution process but instead directed that "the court shall decide the case" of
each individual claimant. Farm Bill § l40l2(f)(l)(B).2 In addition, the Farm Bill appropriated
only $100 million for the payment of successful claims, iwd, § 14012(0](2) _ far too little to
satisfy the number of successful claims that could reasonably be anticipated, although the statute
contemplated the possibility of future additional appropriations. §§Q id,. § l40l2(i)(2), (j``).
After the enactment of the 2008 Farrn Bill, numerous complaints were filed in this
Court under Section l40l2 on behalf of thousands of plaintiffs All of the Section l40l2 actions
2 Certain paragraphs in Section 14012 of the Farm Bill were renumbered by
subsequent legislation Citations in this Opinion refer to the original numbering used in the 2008
statute.
were consolidated in August of 2008 into this miscellaneous case. The case was then stayed to
enable settlement negotiations to proceed, except for the limited purpose of allowing the parties
to brief the question of whether the case should be certified as a class action. _S;e_e Order (Aug. 8,
2008); Minute Order (Oct. l, 2008); Order (Dee. 23, 2008). While briefing on class certification
was underway, the parties continued their settlement discussions. In February 2010, they
reached a settlement agreement that delineated a comprehensive, non-judicial claims resolution
process for plaintiffs seeking recovery under Section 14012 of the Farm Bill. § Defendant’s
Unopposed l\/lotion to Withdraw His Motion to Certify a Rule 23(b)(l) Class, il 3 [Dkt. No. 137].
ln late 2010, Congress appropriated an additional $l.l$ billion to carry out the
terms of the Settlement Agreement, but conditioned this appropriation of additional funds on the
Court’s approval of that agreement, including any modifications agreed to by the parties and
accepted by the Court. in re Blacl< Farmers Discr. l_/itig., 856 F. Supp. 2d at 13, 39. This
conditional commitment is found in Section 201 of the Claims Resolution Aet ("CR_A"). §
PUB. L. NO. lll-29l, § 201(b), 124 Stat. 3064 (20]0). To promote the integrity of the claims
process it endorsed in the CRA, Congress imposed additional requirements on the attorneys and
the prospective appointed neutrals as they carried out the terms of the Settlement Agreement; it
also mandated certain government audits and oversight reports. ld. §§ 20l(g), (h).
Although the funding provided by the Claims Resolution Act was substantial -»~
adding up to 81 .25 billion when combined with the funds appropriated by the l"arm Bill m the
existence of an upper limit on the total funds available for the payment of successful claimants
created a situation markedly different from that in _Eaig@. While the P_igfo_rd Consent Decree
capped the individual amounts that could be awarded for certain types of successful claims, there
was no limit on the total available funds, and thus no prospect that awards would have to be
divided among successful claimants from a limited common fund. And like the Farni Bill, the
Claims Resolution Act included no fee-shifting provision, meaning that any payment of
attorneys’ fees and expenses would inevitably have to be drawn from the same (limited) common
fund.
The Court granted preliminary approval of the Settlement Agreenient and
certified a Rule 23(b)(l )(B) settlement class in May 201 l. § Order (May l3, 2011); Order
(May 20, 201 l). A Fairness Hearing on final approval of the Settlement Agreement was
scheduled, and class counsel undertook the execution of a multifaceted notice program designed
to apprise potential class members of the proposal to certify a class and approve the Settlement
Agreement. The notice program involved direct mailings to tens of thousands of known
potential class members, along with radio, television, print, and online publicity. Written notices
about the proposed settlement informed the class that counsel would be seeking an award of
attorneys’ fees equaling as much as 7.4% of the settlement fund, the date of the Fairness
I-Iearing, and the fact that class members could file written objections to the Settlement
Agreement and potential fee award as well as speak at the fairness Hearing individually or
through counsel. §_@ Plaintiffs’ Motion for Final Approval of Settlemeiit, Ex. A [Dkt. No.
187-3] (detailing notice program); ~i“;l. at l9 (example of direct notice mailed to known potential
class members). Class counsel also filed a motion for an award of attorneys’ fees, seeking an
award set at 7.4% of the common fund m the maximum amount permitted under the Settlement
Agreement. §§Q Class Counsel’s l\/lotion foran Award of Attorneys’ Fees and Expenses [Dkt.
No. 180].
The fairness Hearing was held on September l, 201 l, and the Court entered an
Order and judgment on October 27, 2011, certifying a settlement class, approving the terms of
the settlement, and dismissing the case, while retaining jurisdiction to enforce the Settlement
Agreenient and resolve ancillary matters. §We_§ ln re Black Farmers Discr. Litig., 856 F. Supp. 2d
1 (D.D.C. 2011) (Opinion); In re Black Farmers Discr. Litig., 820 F. Supp. 2d 78 (D.D.C. 2011)
(Order and Judgment).
In its Opinion approving the Settlement Agi'eement, the Court indicated that it
would approve an award of attorneys’ fees to class counsel only after the completion of the
claims resolution process. ln re Black Farmers Discr. Litig., 856 l". Supp. 2d at 25. The lump
sum payment is to be divided among class counsel pursuant to the terms of the Settlement
Agreement and the separate, negotiated Counsel Participation Agreement. *I”d_. The Court also
appointed an Ombudsman and Deputy Ombudsman to, among other things, serve as the Court’s
eyes and ears during the claims process and offer an independent perspective on the
implementation of that process. They have communicated extensively with claimants, attorneys,
farmer advocacy orgariizations, the Court-appointed neutrals, class counsel, and the Court during
the claims process. _S»e~e,, g;yg;, Ombudsman Report Regarding the implementation of the
Settlement Agreement through September 30, 2012 ("Ombudsman Report") [Dkt. No. 319]. 'l`` he
Ombudsman and Deputy Ornbudsrnan have performed admirably and have helped to ensure that
the process has run both efficiently and fairly.
in September 2012, class counsel submitted an updated motion for an award of
attorneys’ fees and expenses. The updated motion -»- still seeking an award set at 7.4% of the
comnion fund - omits an expert declaration included with the original motion that the
government had moved to strike, and it also reflects class counsel’s efforts on behalf of the class
since the approval of the Settlement Agreement and during the claims process.
The government, recognizing that class counsel’s fees will be drawn from the
public fisc, in the form of the funds appropriated by Congress for this case, and that the
government shares an obligation “to ensure that the funds that Congress appropriated . . . are
responsibly disbursed to those for whom Congress and the United States Department of
Agriculture intended the money," has opposed class counsel’s motion in part, arguing that
counsel’s work in this case merits compensation at a rate of 4.1% of the common fund, at the
bottom of the permissible range set forth in the Settlement Agreement. Opp. at 2.
ll. LEGAL STANDARD
"ln a certified class action, the court may award reasonable attorney’s fees and
nontaxable costs that are authorized by law or by the parties’ agreement." FED. R. Cfv. P. 23(h).
"Courts have a duty to ensure that claims for attorneys’ fees are reasonable," Trombley v. Nat’l
City Bani<, 826 F. Supp. 2d 179, 204 (D.D.C. 2011), "in light of the results obtained." Inj
Dep’t of Veterans Affairs (VA) Data Theft Litig., 653 F. Supp. 2d 58, 60 (D.D.C. 2009) (citing
Hensley v. Eckerhart, 461 U.S. 424, 440 (1983)). While the commonly used "lodestar" method
represents one way of calculating reasonable attorneys’ fees, this circuit has indicated that in
cases involving a common fund that has been established for the benefit of the plaintiffs, the
"percentage of the fund" method "is the appropriate mechanism for determining the attorney fees
a\vard.” l_d. (quoting Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, l27l (D.C. Cir. 1993)).
"The common fund doctrine allows an attorney whose efforts ereated, increased
or preserved a fund to recover from the fund the costs of his litigation, including attorneys’ fees."
In re Baan Co. Sec. Litig., 288 F. Supp. 2d l4, 16 (D.D.C. 2003) (quotations omitted). 'l``his
percentage-of-the-fund approach "lielps to align more closely the interests of the attorneys with
the interests of the parties," Dernocratic Cent. Comm. of Dist. of Columbia v. Washington
Metro. Area Transit Comm’n, 3 F.3d 1568, 1573 (D.C. Cir. 1993), by discouraging inflation of
attorney hours and promoting "eflicient prosecution and early resolution of litigation, which
clearly benefits both litigants and the judicial system." Tromblev v. Nat’l City Bank 826 F.
Supp. 2d at 205 (quoting in re Lorazepam & Clorazepate Antitrust Litig., 205 F.R.D. 369, 383
(D.D.C. 2002)); gee Swedish l-iosp. Corp. v. Shalala, 1 i*``.3d at 1268-69.
"Once it is determined that the attomeys are entitled to be paid from the common
fund, it is the duty of the court to determine the appropriate amount," based on "reasonableness
under the circumstances of a particular case." Democratic Cent. Comm. of Dist. of Columbia v.
Washington Metro. Area Transit Comm’n, 3 F.3d at 1573. The Court’s independent scrutiny of
an award’s reasonableness is particularly important in common fund cases, because "the conflict
between a class and its attorneys may be most stark where a common fund is created and the fee
award comes out of, and thus directly reduces, the class recovery." l_d. (quotation omitted); s_eg
Swedish Hosp. Corp. v. Shalala, 1 F.3d at l265. "[W]here the settlement agreement creates a
common fund against which individual plaintiffs may make claims," the Court must "‘act as
fiduciary for the beneliciaries"’ of the fund "‘because few, if any, of the action’s beneficiaries
actually are before the court at the time the fees are set"’ and because "‘there is no adversary
process that can be relied upon in the setting of a reasonable fee."’ In re Dep’t of Veteraiis
Affairs (VA) Data Theft Litig., 653 F. Supp. 2d at 60 (quoting Couizr AwARDaD ATTORNEY
Fisiss: Rui>onr or rita Tiiini) CIRCUIT T/isi<; Fonce, 108 F.R.D. 237, 251 (1985)).
"While this Circuit has not yet developed a formal list of factors to be considered
in evaluating fee requests under the percentage~of-recovery method, other jurisdictions have
delineated factors that courts should consider in evaluating fee requests." ln re Lorazepam &
Clorazepate Antitrust Litig., Misc. No. 99-276, 2003 WL 22037741, at *8 (D.D.C. June 16,
2003). Courts typically consider seven factors to guide their inquiries:
(l) the size of the fund created and the number of persons
benefitted, (2) the presence or absence of substantial objections by
class members to the settlement terms or fees requested by
counsel, (3) the skill and efficiency of the attorneys involved,
(4) the complexity and duration of litigation, (5) the risk of non-
payrnent, (6) the time devoted to the case by plaintiffs’ counsel,
and (7) awards in similar cases.
'l``romblev v. Nat’l Citv Bank, 826 F. Supp. 2d at 204; game also Welis v. Allstate lns. Co., 557
F. Supp. 2d l, 6 (D.D.C. 2008); hire Baan Co. Sec. Litig., 288 F. Supp. 2d at 17.
Iil. DISCUSSION
With respect to the seven factors cited above, the government does not question
the skill and efficiency of class counsel or the fact that class counsel faced the risk of non-
payment when they agreed to represent class members in this litigation _Se_e_ Opp. at 4. lt does
argue, however, that class counsel is not entitled to a 7.4% fee award in light of the amount of
time they devoted to this case and because this litigation was neither long in duration nor
particularly coniplex. I;i. at 4-8. The government also maintains that the fee awards in similar
common fund cases do not provide an apt comparison on which the Court can base a 7.4% fee
award. Q. at 8~10. Finaliy, the government notes that because there are likely to be insufficient
funds to pay the awards of all potentially successful claimants, "every dollar that is awarded to
Class Counsel in fees is one less dollar that is available to pay successful class inembers." §
at l', see a_lY § at 7-8.3 For these reasons, the government urges the Court to exercise its
discretion to limit the award to class counsel to 4.1% of the common fund. § _i_d. at ll-l2.
3 This final argument advanced by the government has since lost ail force: the
status report filed by class counsel on july 8, 2013 demonstrates that even after the payment of
9
ln approving the Settlement Agreement, the Court explained why consideration of
the seven factors may justify, as fair and reasonable, an award of attorneys’ fees and expenses
equaling as much as 7.4% of the common fund. ln re Black Farmers Discr. Litig., 856 F. Supp.
2d at 38~41. Many of the observations made then support the Court’s conclusion today regarding
the specific percentage of the fund at which, in its discretion, the Court has concluded the award
should be set. in addition, the Court now is in a position to assess, in view of the government’s
arguments, the effectiveness of class counsel’s performance over the course of more than twenty
months since the settlement was approved, including counsel’s implementation of the claims
process and the other tasks associated with the performance of their responsibilities under the
Settlement Agreement.
A. Percentage-oj"-rhe-FundAnalysfs
l. The Size of the Fund and the Number of Persons Benefitted
As the Court already has observed: "In the absence of the services of class
counsel, the members of the plaintiffs’ class would not be in a position to divide up $l .25 billion
(less implementation costs}; they would be engaged in a chaotic struggle to win a portion of the
3100 million appropriated by the 2008 Farm Bill before those funds ran out." in re Black
Farmers Discr. Litig., 856 F. Supp. 2d at 38~39. Class counsel do not attempt to take all the
credit for the appropriation by Congress of an additional $l .l 5 billion to fund successful claims
in this action, as that credit must be shared with other groups and individuals who advocated
before Congress and the public about the cause of Pigford late-filers and the critical need for
attorneys’ fees in the full amount requested and of all implementation costs, there will be
sufficient settlement funds to pay all prevailing class members the full amount of the award
authorized by the Settlement Agreernent and the Farm Bill. §_e§ Status Report Regarding
Projected "l``iineline for Completion of Claims Process ("Status Report") [Dkt. No. 367]; m at
29-30.
10
additional funding.“l Yet "[als the Claims Resolution Act’s specific references to the settlement
agreement make clear, the execution of an agreement between class counsel and defendant’s
counsel was a necessary catalyst leading to the appropriation of a great deal of additional funding
for this litigation." n re Black Farmers Discr. Litig., 856 F. Supp. 2d at 39 (citing CRA
§§ 201 (a), (b)). By reaching a comprehensive settlement with the government that encouraged
confidence within the legislative and executive branches about the wisdom of supplying
additional funding, class counsel’s efforts undoubtedly "increased" and "preserved" the common
fund benefitting the plaintiffs in this action. in re Baan Co. Sec. Litig., 288 F. Supp. 2d at 16.
As the Court has recognized, "[w]ithout the services of class counsel, there would be no recovery
for most class members." n re Black Farmers Discr. Litig., 856 F. Supp. 2d at 39.
Beyond helping to secure additional funding through the Claims Resolution Act,
class counsel’s success in negotiating the Settlement Agreement has increased the number of
persons benefitted by this case in other ways. The Settlement Agreement enables plaintiffs to
pursue their claims in an expedited, non-judicial forum _ a development that, as a matter of
practical reality, is essential to making the adjudication of claims and the payment of successful
plaintiffs attainable. By contrast, if each of the tens of thousands of individual plaintiffs were
required to present his or her case directly to the Court for a decision, as the Farm Bill originally
specified, gee § l40l2(f)(l)(B), given the unprecedented amount of judicial resources that would
have been required, recovery for most class members would have been postponed into the far
4 § Mem. at 3 n.6 (noting that "the National Black Farmers Association
(spearheaded by John Boyd), the Federation of Southern Cooperatives, and other farm advocacy
groups played key roles in advocating for . . . passage of the 2010 Claims Resolution Act"); § at
23 (stating that it was as a result of "the intense and sustained efforts of Class Counsel in this
action over the duration of the case and of Class Counsel’s effective advocacy that, together with
the ejj’or!s of r)ihers, led to the fill . l 5 billion in additional funding for this Settlement provided by
the Claims Resolution Act") (emphasis added).
ll
distant future - even assuming that sufficient funds were available to pay all successful claims.
F or a class that includes many elderly individuals seeking redress for acts of discrimination that
in some instances stretch back to the l980s, the establishment of a streamlined claims resolution
process is an achievement that confers significant benefit on the plaintiffs in addition, their
prospects for success were enhanced by class counsel’s negotiated elimination of the imposing
evidentiary requirement that a claimant identify two specific and "similarly situated white
farmers" who obtained more favorable results from the USDA, in re Black Farmers Discr. Litig.,
856 F. Supp. 2d at 9 (quoting Consent Decree il 9(a)(i)(C)) ~»- a legacy of the _Ijgfo_rd claims
resolution process that was replicated in the F arm Bill.
The Settlement Agreement negotiated by class counsel also has benefitted
plaintiffs by imposing a categorical prohibition on the acceleration or foreclosure of any USDA
loans that form the basis of a plaintiff s claim, during the pendency of that claim. Settlement
Agreeinent § VIi.A. In contrast, the F arm Bill required plaintiffs seeking such deferral to make
"a prima facie case in an appropriate administrative proceeding that the acceleration or
foreclosure is related to a claim." farm Bill § l40l2(h)(2).
All told, class Counsel’s adept negotiation of the Settlement Agreement
dramatically benefitted the class by ensuring that a greater number of plaintiffs likely will prevail
on their claims than otherwise, that these claims will be resolved and payments issued in a timely
manner, and that adequate funding will exist to provide meaningful compensation to each
successful plaintiff.
By the same token, Congress’ appropriation of the additional $l .l5 billion that
forms the bulk of the common fund was a legislative decision, informed in part by policy
considerations independent of class counsel’s efforts. l\/loreover, the precise amount
l2
appropriated by Congress bears no direct relationship to those efforts, instead seemingly
reflecting a choice to fix a sum that approximates the total funds paid out by the government in
the Pigford case. Therefore, although the negotiation of the Settlement Agreement by class
counsel clearly was a "necessary catalyst" without which additional funding for this action may
well not have rnaterialized, in re Black Farmers Discr. Litig., 856 F. Supp. 2d at 39, the
relationship between the amount of the common fund and counsel’s efforts may be more
attenuated than in some common fund cases, and the credit for the expansion of the fund does
not rest entirely with class counsel.s
2. The Presence or Absence of Substantial Objections by Class Members to
the Settlement Terms or Fees Requested by Counsel
Objections by class members to the award of attorneys’ fees sought by class
counsel have been few in number. indeed, the Court emphasized "the lack of substantial
objections to the fee range set by the settlement agreement” in concluding at the settlement stage
that a fee award between 4.1% and 7.4% of the common fund was fair and reasonable. The
Court further observed that even the few objections that were voiced generally lacked substance:
Although numerous individuals have objected to the prospect of a
$90 million award of attorneys’ fees, at the high end of the
proposed range, none of those individuals has proposed a
reasonable alternative measure of fees. Nor have they provided
specific reasons that the proposed range is unfair or unreasonable,
aside from the fact that the fee award will inevitably reduce the
fund available for payments to the class - a necessary and
unavoidable result.
5 in addition, the government apparently was as desirous as the plaintiffs of
securing an expedited, non~judicial claims resolution process requiring minimal participation by
government lawyers, and with avoiding the administrative burdens on the USDA contemplated
by the 2008 F arm Bill, which required the agency to supply each claimant with certain loan data
from the claimant’s county _ a requirement clearly aimed at helping claimants satisfy the
"similarly situated white farmer" requirement for successful claims. §§§ Farm Bill § l40l2(e).
13
in re Black Farmers Discr. Litig., 856 F. Supp. 2d at 41; _bi_it §§ s_ur&t note 3; _iwn%frva at 29»30.
Out of a class comprising tens of thousands of plaintiffs w each holding a
potential stake of $50,000 or more in this litigation (that being the minimum payment to which
successful P_igf;d plaintiffs were entitled) - only 25 individuals filed objections to the
proposed Settlement Agreement (including its range of 4.1% to 7.4% in attorneys’ fees) or to
class counsel’s request for a 7.4% fee award. And among this relatively small group, many of
the ostensible objections actually expressed no real disagreement with the terms of the
Settlement Agreement (including the attorneys’ fees provision), while others were submitted by
individuals who were not class members and therefore had no right to object to either the
Settlement Agreement or class counsel’s motion for a fee award. _Smewe FED. R. CIV. P. 23(e)(5)
(providing that only a "class member" may object to a proposed class action settlement)', FED. R.
ClV. P. 23(h)(2) (providing that only a "class member, or a party from whom payment is sought"
may object to a motion for attorneys’ fees by class counsel). As noted, some individuals who
spoke at the Fairness i-learing expressed the view that the attorneys’ fees sought by class counsel
were excessive, but none of those who balked at the 7.4% rate presented a tangible basis for the
objection, aside from the sheer size of the award and the assumption, now proven unfounded,
that it would reduce plaintiffs’ recovery.
3. The Skill and Efficiency of the Attorneys involved
There is little question about the skill and efficiency demonstrated by class
counsel in this action. lndeed, even as they challenge other aspects of the fee motion, the
exemplary team of lawyers from the Department of justice and the USDA involved in this case
for the government state that there is not ‘°any dispute regarding Class Counsel’s skill." Opp.
at 4.
14
The prosecution of this case entailed a diverse array of challenges. Surniounting
these difficulties called for a host of skills by class counsel, including the ability to craft a
complex settlement agreement delineating a process for the expedited resolution of plaintiffs’
claims, to successfully negotiate with the government concerning the terms of this agreement and
later secure the Court’s approval, to orchestrate a vast claims resolution process that maximized
Counsel’s assistance to an enormous class of plaintiffs spread across the country, to supervise the
efforts of a large team of lawyers providing assistance to these plaintiffs and ensure that they be
sufficiently versed in the governmental credit programs underlying the plaintiffs’ claims to
provide useful assistance in completing and submitting claim forms, and to resolve bedeviling
logistical glitches that arose with respect to particular groups of plaintiffs during the claims
process.
Successfully coordinating the efforts of over twenty law firms, class counsel have
demonstrated the sophistication necessary to effectively brief complex class certification issues
before this Court and to defend the Settlement Agreement on appeal before the D.C. Circuit, the
skill to negotiate with the government’s experienced legal team and obtain advantageous terms
for the plaintiffs, and the logistical wherewithal to help implement the massive claims process -
a task that demanded making myriad strategic adjustments as the process unfolded in response to
a host of pragmatic difficulties
"The sign-up period of the settlement, in which tens of thousands of class
members needed to submit complete claim packages, required significant expertise and
commitrnent." Ombudsman Report at 31. While there were indications that some meetings held
by class counsel to assist claimants may have been insufficiently staffed at the very beginning of
the claims proccss, and that some claimants had to travel significant distances to attend meetings,
15
class counsel promptiy responded to these concerns by adding meetings in areas of the country
where there had been significant turnouts. The problem of staffing and organization at meetings
appears to have been resolved quickly. I_d. at 26; g Reply, Ex. C fill 4-7 (describing the
challenge of organizing meetings and improvements made by class counsel during the process).
Furtherrnore, while some individuals reported that it was difficult to arrange to talk directly with
class counsel by telephone, perhaps as a result of the call-back system that class counsel utilized,
ultimately people "who continued to try to speak with Class Counsei . . . were able to do so."
Ombudsman Report at 26. In sum: "Although there were some logistical difficulties in the
process, a reasonably diligent person had ample opportunity to receive assistance from Class
Counsel in filing a claim." M. at 30.
With respect to the overall design and implementation of the claims resolution
process, class counsel rightly contend that "the absence of any significant administrative
difficulties or delays in the claims process attests to the detailed and skillful work performed by
Class Counsel throughout all phases of this case." l{epiy at 8. While some limited delay was
caused by ciass Counsel’s failure to anticipate certain logistical problems in the processing of
claims - requiring class counsel to submit a motion to provide particular classes of claimants
more time to return their claims packages, aj Motion to Modify Final Order and judgment {Dkt.
No. 300] _ the delay was not unreasonable given the number of potential claimants and the
logistical challenges presented, and class counsel worked hard to correct the problems they
identified as promptly as possible. ln view of the complexity and intricacy of the situation with
which they were faced, there is no doubt that class counsel’s skill and efficiency resulted in a
claims resolution process that, now proceeding apace, is on track to provide full remedial awards
to successful claimants that have eluded these African American farmers for so many years.
l6
4. The Complexity and Duration of the Litigation
"fhis action posed unique challenges for class counsel, many of which the Court
already has acl760 F. Supp. 2d 73, 78 (D.D.C. 2011) ("While there was no lengthy
litigation, counsel should not be penalized for achieving an effective and efficient settlement."
(quoting ln re Vitamins Antitrust Litig., l\/Iisc. No. 99»197, 2001 WL 34312839, at * ll (D.D.C.
lilly 16, 2001))).
Among many other novel challenges they faced, class counsel had to devise a fair
and efficacious manner of resolving a potentially very large number of claims with funds drawn
18
from a limited pool. At least twenty drafts of the Settlement Agreement were exchanged
between the parties in an effort to achieve this shared goal.
While the government depicts this negotiation process as merely "fine-tuning the
agreement in principle reached early on in the litigation," Opp. at 5, in a case of such magnitude
and complexity it is precisely this process of “fine~tuning" that leads to the creation of an
effective non~judicial claims forum rather than one that might become bogged down in
unforeseen hitches or unintended omissions, resulting in adverse consequences for claimants.
Indeed, this attention to precision and detail may ultimately spell the difference between success
or failure for thousands of claimants. Furthermore, even after reaching an accord with the
government on a proposed settlement, class counsel were required to further revise this
agreement in response to concerns expressed by the Court, ppg Dkt. Nos. 168, l70, 171, and
requirements imposed by Congress under the Claims Resolution Act.
An exclusive focus on the lack of discovery, merits briefing, and trial gives short
shrift to the unenviable logistical challenges that confronted class counsel in designing and
implementing the claims resolution process in this case -- "a complicated and formidable
undertaking" that "called for the evaluation and sign-up of tens of thousands of clairnants."
Ombudsman Report at l. Given the intricate requirements for class membership and the often
dated information available about the individuals who unsuccessfully sought to participate in
i, even the initial process of properly identifying and communicating with class members
was no easy task. Class counsel, working together with the Claims Administrator, "devoted
considerable effort, expertise, and resources to the task of distributing Claim Forms to potential
claimants," and as a result of their efforts over 96,000 claim forms were sent to potential class
members. Ld_. at l 8~19.
l9
This was only the tip of the iceberg for class counsel, who committed to providing
assistance to all class members in the completion and submission of their claim forms. Carrying
out this task entailed developing a systematic program of meetings held across the country, a
program that strategically located and scheduled meetings to maximize counsel’s efforts and
reach the largest possible number of claimants. Class counsel report that during the claims
period they held 384 group meetings in 66 cities and 23 states and in Washington, I).C., which
allowed counsel to assist nearly 22,000 potential claimants in person. Ombudsman Report at 26.
These group meetings were staffed by multiple attorneys and paralegals to assure that putative
class members had.access to iri-person assistance from legal professionals. And the in-person
meetings were supplemented by a system of toll-free telephone assistance, through which class
counsel spoke with over 3,600 claimants. _I_d. at 25.
Providing these services demanded that the meetings be designed with sufficient
care to run smoothly and ensure that all potential claimants received attention. lt also required
that the attorneys assisting these thousands of claimants be sufficiently knowledgeable about the
underlying USDA farm loan programs to offer effective assistance Making such assistance
available to this large and disparate class was indeed an arduous undertaking § generally
Reply, Ex. B (Declaration of Stephen l\/I. Coe); i_d., Ex. C (Declaration of Eric .l. Sanchez)
(recounting diverse challenges of designing and implementing strategy for claimant assistance
meetings).
ln addition, as class counsel have accurately explained on their own behalf, they
have devoted thousands of hours over the past year and a half to, among other things, "working
with the Claims Administrator to refine the claims process and to address difficult issues as they
arose," "interfacing with the Track A and B Neutrals to ensure that the claims adjudication
20
process was proceeding smoothly," "working with the Ombudsman and Deputy Ombudsman to
address issues and to implement suggestions raised by them," "cooperating with the General
Accounting Office and the Office of the inspector General of the U.S. Department of Agriculture
as they have implemented their audit responsibilities under the Claims Resolution Act of 2010,"
"responding to questions raised by thousands of non-Class Members who sought to determine
their eligibility to participate in the Settlement," and “coordinating with farm advocacy groups
and enlisting their support to disseminate information about the claims process and to combat
fraudulent schemes designed to prey on unsuspecting black farmers." Reply at 2.
Although this case required less in the way of discovery, motions practice, and
in-court activity than many class actions, therefore, and although class counsel benefitted from
the work performed in Egfnqr~d, the manifold complications inherent in crafting and negotiating
the Settlement Agreement, and in implementing the enormous claims resolution process,
undermine the government’s assertion that an ostensible lack of complexity in this case warrants
setting counsel’s fee award at the very bottom of the range negotiated by the parties
5. The Risk of Nonpayment
The risk of nonpayment is a factor that weighs heavily in favor of a considerable
award in this case. Some of the lawyers now denominated as class counsel originally brought
Section 14012 complaints to this Court on a contingency fee basis, with no guarantee that their
clients’ cases would be certified as part of a class action and successfully resolved through
settlement or that this result would be achieved at all expeditiously Counsel instead faced the
real prospect of presenting the claims of individual plaintiffs to the Court for determination on a
case-by~case basis (probably over many years, given the judicial resources that would be
required), as contemplated by the Farm Bill. Given the difficulty of determining with certainty
21
whether particular individuals truly qualified for relief under Section l40l2, counsel also ran the
risk that many of their clients would be found ineligible even before their claims were
adjudicated on the merits.
As for those prospective merits-based adjudications, the litigation contemplated
by Section 14012 of the Farm Bill itself promised uncertain results. And even if counsel’s
clients were to prevail, it was unlikely that enough money would be available to pay the
successful litigants (and their attorneys), as the Farm Bill appropriated only $100 million for
Section 14012 claims. Finally, even after a Settlement Agreement was reached to resolve the
plaintiffs’ claims in a non»judicial forum, had funding remained capped at $100 million, "class
counsel would have been left to scramble for any fees that could be eked out of a fund vastly
insufficient to pay all claims against it, and the payment of any fees that were forthcoming may
have been delayed for years." ln re Black Farmers Discr. I_,itig., 856 F. Supp. 2d at ¢ll.
Moreover, during the course of this litigation, as class counsel have faced the
uncertainty of not knowing what amount of compensation they ultimately will receive, they have
also incurred significant out-of-pocket expenses, largely associated with pre-settlement outreach
and advocacy efforts and with assisting claimants during the extensive post-settlement claims
process. Class counsel have reported that, by September of last year, the outlays incurred by one
firm alone exceeded ten million dollars. §e_e Reply at 7-8; i_d., Ex. A (Declaration of James S.
Farrin) (describing firm’s payments and obligations as exceeding $10 million, leading to maxed-
out credit lines, the laying off of staff members, and the necessity of signing personal guarantees
on loans). And as of earlier this week, two firms - the Law ()ffices of .lames Scott Farrin and
l\/lorgan & Morgan, P.A. ~»»» reported that they have collectively incurred in excess of 818 million
in out-of~pocket expenses and obligations in connection with this case. §§ Supp. Filing at l.
22
'l``o date, the Farrin firm has incurred over $l3 million in expenses for client communications,
legislative activities, public relations efforts, legal fees for outside counsel not working on a
contingent basis, expenses related to the claims administration process, and finance charges. g
ind,, Ex. l (Supplemental Declaration of J ames S. Farrin). l\/lorgan & l\/Iorgan has incurred over
$5 million in out-of-pocket expenses with respect to similar activities. §§ Q., Ex. 2
(Declaration of Gregorio A. Francis). Other firms have also advanced significant costs
throughout the life of this case. § at 2.
Yet, to date, these law firms have received no reimbursement for these out-of-
pocket expenses which, as characterized by Mr. Fan'in, have "been carried at risk for over five
years." Supp. Farrin Decl. 1l2', s_ee §§ Francis Decl. 1l2 (same characterization, "for over four
years"). Absent the settlement of this case, they might never have been reimbursed for many of
these costs and expenses. And under the terms of the Settlement Agreement, the law firms
involved in this litigation agreed that they would not be reimbursed for any of their out-of-pocket
expenses or paid any attorneys’ fees until the same time that successful claimants receive their
award payments, after the claims process has run its course. _S@ Settlement Agreement
§§ V.E.S, V.E.l0. In light of these considerations, the Court’s previous observation that this
litigation "was no sure bet for plaintiffs’ lawyers" was, if anything, an understatement. l_n_rp_
Black Farmers Discr. Litig., 856 F, Supp. 2d at ¢ll.
6. "l``he Amount of Time Devoted to the Case by Plaintiffs’ Counsel
Class counsel have reported spending an immense amount of time on this action.
T hey say they have assisted over 25,000 class members during the claims process and have
submitted approximately 13,000 claim forms, §_ep l\/lem. at l6 -»~ each of which required counsel
to attest under penalty of perjury that, to the best of counsel’s knowledge, the claim was
23
supported by the law and the evidence. § CRA § 20l(g)(5). More specifically, according to
the updated fee motion, the firms appointed as class counsel have reported to lead class counsel
in excess of 40,000 attorney hours and 60,000 paralegal hours spent during the period preceding
the Court’s approval of the Settlement Agreernent and, as the claims process has unfolded, more
than 40,000 additional attorney hours and over 100,000 additional paralegal hours between
approval of the Settlement Agreement and the submission of class counsel’s motion. Mem.
at 19.6
Class counsel’s work is ongoing: since the filing of their fee motion they have,
among other things, worked with the Claims Administrator and the Ombudsman to ensure that
the various steps involved in the final stages of the claims process can proceed smoothly, helped
to resolve logistical problems regarding the processing of certain categories of claims,
cooperated with auditors from the General Accounting Office and the USDA conducting the
oversight investigations mandated by the Claims Resolution Act, and coordinated with various
parties to finalize preparations for the notification of plaintiffs about the results of their claims
and the payment of successful claims. §§_e Mem. at 18-19. Furthermore, class counsel profess
themselves "committed to devoting whatever additional time and effort is necessary going
forward to bring the claims and payment process to a successful conclusion." ld. at 37. Indeed,
class counsel "will continue to incur expenses in connection with this case, and will continue to
devote substantial time on behalf of the Class, until all of the Settlement Funds have been
distributed in accordance with this Court’s orders." Supp. Filing at l.
The government acknowledges that class counsel "have devoted substantial time
and effort to implement the non-judicial claims process established under the Settlement
6 See infra note 8 for a discussion regarding documentation for the hours class
counsel have reported expending.
24
Agreement, and to provide legal advice and assistance to class members." Opp. at 6-7. But, the
government suggests, class counsel’s reported hours must be "grossly inflated, given that there
was very little original work to perform in this case." M. at 7. As the Court already has
indicated, it does not agree that this case involved little original work, §§ s_i_rp§i at 14-21, and it
accepts the representations of class counsel as to the number of hours spent by attorneys and
paralegals in this case. lt believes that the large number of hours expended by class counsel is a
product of the complexity of the tasks they undertook and their adherence to the professional
obligations owed to the class -- not to mention their likely expectation that the Court would base
its fee determination in part on an assessment of how good a job they did for their clients.
7. Awards in Similar Cases
'l``o award the full fee requested by class counsel -~ 7.4% of the coinmon fund _
would be consistent with the awards approved in comparable common fund cases, if anything
falling at the low end of the range for such awards.
As a general matter, "a majority of common fund class action fee awards fall
between twenty and thirty percent." In re Baan Co. Sec. Litig., 288 F. Supp. 2d at 17 (quoting
Swedish Hosp. Co;p. v. Shalala, l F.3d at 1272); §§ Dernocratic Cent. Comm. of Dist. of
Columbia v. Washington Metro. Area "[``ransit Comm’n, 3 F.3d at 1575 (finding that 23.3% fee
"falls well within the range usually awarded in common fund cases"); ,s_c; Lso Vizcaino v.
Microsoft Corp., 290 F.3d 1043, l050 n.4 (9th Cir. 2002) (describing survey of fee awards in
34 common fund settlements from 1996 to 2001 and finding a majority clustered in the 20% to
30% range). Fees awarded in this circuit "rnirroi‘ the nationwide nurnbers.” n re Dep’t of
Veterans Affairs (VA) Data Theft Litig., 653 F. Supp. 2d at 61; §§ Sweciish Hosp. Corp. v.
Shalaia, 1 F.3d at 1272 (approviiig 20% award); Trombley v. Nat’l Citv Bank, 826 F. Supp. 2d at
25
206 (approving 22% to 25% award); ln re Baan Co. Sec. Litig., 288 F. Supp. 2d at 17 (approving
28% award); In re Lorazepam & Clorazenate Antitrust Litig., 2003 WL 22037741, at *8~9
(approving 30% award). "ln some cases, the percentage has been even greater." Trombley v.
Nat’l City Banl<, 826 F. Supp. 2d at 206; se_e Radosti v. Envision EMI, LLC, 760 F. Supp. 2d at
78 (approving 33% award); ln re Vitarnins Antitrust Litig., 2001 WL 34312839, at *10
(approving 34% award); Welis v. Allstate Ins. Co., 557 F. Supp. 2d at 7 (approving 45% award
in "unique" case).
"Larger common funds are typically associated with smaller percentage awards,
however, because even a small percentage of a very large fund yields ‘a very large fee awar .
In re Black Farmers Discr. Litig., 856 F. Supp. 2d at 39 (quoting Wal-Mart Stores, lnc. v. Visa
U.S.A. lnc., 396 F.Bd 96, 122 (2d Cir. 2005)). "Where the common fund is worth many
millions or even billions of dollars _ in so-called ‘megafund’ cases - an appropriate fee may
be considerably less than twenty percent of the fund," Q., and it is here that "courts most
stringently weigh the economics of scale inherent in class actions in fixing an appropriate per
cent recovery for reasonable fees." In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297,
351 (N.D. Ga. 1993); gregg AT&T l\/lobilitv Wireless Data Servs. Sales Tax Litig., 792 F. Supp. 2d
1028, 1033 (N.D. lll. 2011) (surveying studies of awards in megafund cases). Still, even in
megafund cases involving recoveries "of $100 million or more, “fees of fifteen percent are
common." ln re Lorazepam & Clorazepate Antitrust Litig., 2003 WL 2203 7741, at *7; § _S_h_a_w
v. Toshiba Am. lnfo. Svs., Inc., 91 F. Supp. 2d 942, 989-90 (E.D. Tex. 2000) (surveying cases
decided between 1993 and 1999). And "even in cases where, as here, the common fund is over
one billion dollars," an award of 7.4% would be “uriexceptional." In re Black Farmers Discr.
Litig., 856 F. Supp. 2d at 40. As the Court has explained:
26
According to one study, in cases involving common funds “from
3500 million to $l billion" in 2006 and 2007, "the mean and
median awards were both 12.9%" of the fund. In re A'l``&'l``
Mobility Wireless Data Servs. Sales Tax Litig., 792 F. Supp. 2d at
§033 (citing BRIAN T. Frrzi>Arnici<, AN E)Mrinic,li, Sruov or
CLAss Ac'rlon SarrLBMaNTs AND Tn'aln FEE AWARDS, 7 J.
EMPiRic/».L LEGAL S"ruo. 811, 839 (2010)). in other cases, where
the class recovery exceed $1 billion, courts have approved awards
in the 5 to 10% range. See, e.g., Wal-Mart Stores, Inc. v. Visa
U.S.A. Inc., 396 F.3d at 122 (approving district court’s award of
6.5% of 83 billion fund); ln re Enron Corp. Securities, Derivative
& “ERISA" Litig., 586 F. Supp. 2d 732, 740, 828 (S.D. Tex. 2008)
(approving award equal to 9.52% of $7.2 billion fund).
The awards approved in similar cases, therefore, do not in themselves suggest that
counsel’s fee should be reduced below the 7.4% of the common fund that they have requested.
Any such reduction must instead be founded on considerations ~»- such as the complexity and
duration of the case _ that reveal this case to be dissimilar to typical megafund cases, in which,
as just discussed, an award of 7.4% clearly would be reasonable.
To that end, class counsel and the government dispute the significance of the fee
award granted in perhaps the most similar case available, Keepseagle v. Vilsack, Civil Action
No. 99-3119 (D.D.C.). In that case -- a class action against the USDA involving discrimination
against Native Ainerican farmers _ judge Sullivan approved an award equal to 8% of a $760
million common fund. § Order on Plaintiffs’ l\/lotion for Final Approval of Settlement, 11 8,
Keepseagle v. Vilsack, Civil Action No. 99-31 l9, (D.D.C. Apr. 28, 2011). According to the
government, however, Keepseagle does not provide an apt comparison:
[T]he parties vigorously litigated that case for 10 years, which
included producing millions of pages of documents during
discovery; taking approximately 100 depositions in 13 states,
including those of expert witnesses; and briefing class certification
twice, including an appeal of class certification pursuant to Federal
Rule of Civil Procedure 23(1``), before initiating settlement
27
negotiations in 2009. ln contrast, in this case, the parties, promptly
and without any discovery, reached a settlement agreement, and
with briefing only on class certification that required Class
Counsel to file only one 25-page brief.
Opp. at 7-8 (citation omitted). Notwithstanding these points, the Court tends to agree with class
counsel that a comparison with the Keepseagle award supports, rather than undermines, the fee
request here.
Although Keepseagle was litigated over a much longer period of time and
involved extensive discovery, unique complications are present in this case that were absent in
Keepseagle, including _ to cite just one example ~#-~ more intricate requirements for entitlement
to relief, predicated in part on an unsuccessful attempt to participate in an earlier lawsuit. ln
addition, only approximately 5,000 claim forms were submitted in Keepseagle, § Status Report
on the Claims Process, at l, Keepseagle v. Vilsack, Civil Action No. 99-31 19 (D.D.C. l\/lar. 9,
2012), compared with well over 30,000 claim forms that were submitted in this case,
approximately 13,000 of which were prepared and signed by class counsel. § Ombudsman
Report at 30. Furthermore, while the government emphasizes the extensive discovery and
briefing that took place in Keepseagle prior to the commencement of settlement negotiations, it
overlooks the fact that the settlement agreement ultimately approved in that case was closely
patterned on the settlement agreement negotiated by class counsel and the government here. ”Smew§
Motion for Preliminary Approval of Settlement Agreement, Ex. l, Keep seagle v. Vilsack, Civil
Action No. 99-3119 (D.D.C. Oct. 22, 2010). Thus, the Keepseagle precedent supports an award
of the full 7.4% that class counsel are requesting in this case.
lt also is worth noting that thousands of plaintiffs who retained the law firms later
appointed as class counsel to represent them in their Section 14012 claims signed traditional
contingency fee agreements entitling the attorneys to be compensated at a rate of 33% of any
28
recovery. If this serves as any indication of the market value for class counsel’s services, it
certainly supports a fee award of up to 7.4% of the common fund. § Swedish Hosp. Corp. v.
§_h_al_al_a, l F.f``)d at 1269 (noting that "a percentage»of-the-fund approach more accurately reflects
the economics of litigation practice" and suggesting that fee agreements with class members can
indicate the marketplace value of services); Gunter v. Ridgewood Energv Corp., 223 F.3d 190,
198 (3d Cir. 2000) ("‘[O]ne purpose of the percentage method’ of awarding fees - rather than
the lodestar method, which arguably encourages lawyers to run up their billable hours - ‘is to
encourage early settlements by not penalizing efficient counsel."’ (quoting MANUAL ron
CoMPLEx intention (Tuii142 F.3d 1286, 1292 (D.C. Cir. 1998) (Wald, J., concurring)
(noting that courts evaluate the public benefit under fee-shifting statutes "all the time"). Class
counsel’s success in resolving the Pigford claims that were brought back to life by Congress in
the Farin Bill has served the public interest in at least two significant ways. First, it allowed tens
of thousands of Afi'ican American farmers who failed to timely file claims in Pigford to have
their grievances adjudicated on the merits, providing long-sought redress with as little further
delay as possible. Second, by resolving these pending claims comprehensively, through a
relatively swift claims process, the Settlement Agreement allows the government to finally turn
the page on this particular chapter in the USDA’s history, avoiding the prospect of another
decade or more spent litigating against individual plaintiffs’ claims of discrimination. ln sum,
class counsel’s efforts have garnered a substantial measure of justice for a group to which it has
long been denied, in a manner that will allow the government to refocus its limited legal
resources elsewhere.
30
B. Lodes!'ar Cross'-Cheek
Soine circuits that employ the "percentage of the fund" method to calculate
attorneys’ fees in common fund class actions have suggested that district courts cross-check the
percentage award at which they arrive against the results of the "lodestar" award method, "to
determine whether the percentage award roughly reflects the time and expertise the attomeys
invested in the case." In re Dep’t of Veterans Affairs (VA) Data 'l``heft Litig., 653 F. Supp. 2d at
6l (citing Gunter v. Ridgewood Energv Corp., 223 F.3d at 195 n. l). ln this circuit, such a
lodestar cross-check is not required, Tromblev v. Nat’l Citv Bank, 826 ll. Supp. 2d at 205 (citing
Swedish Hosp. Corn. v. Shalala, 1 F.3d at 1266-6'7), although district courts are free to employ
such a cross~check at their discretion to confirm the reasonableness of an award. §Me#;c”, g;g_., wills
v. Allstate Ins. Co., 557 F. Supp. 2d at 7; ln re Baan Co. Sec. Litigg., 288 F. Supp. 2d at 19-20.
Class counsel report that a lodestar calculation of the hours they expended as of
the date they submitted their updated fee motion in September 2012, using rates from the "Laffey
l\/latrix," yields an amount of approximately 850 million. l\/lem. at 39.8 This figure does not
include the considerable hours spent by class counsel since the filing of the updated fee motion
8 The government questions the accuracy of class counsel’s lodestar analysis,
pointing out that class counsel have not provided time records or affidavits delineating the hours
they have expended or the specific tasks for which they seek payment, nor have they identified
the billing rates they applied or each attorney’s years of experience. Opp. at 7-8 n.4. Requiring
the Court to examine and evaluate the detailed submissions that the government contemplates,
however, would defeat one of the primary benefits of the "percentage of the fund" method.
Indeed, the advantage of this method over the lodestar approach is that the latter "makes
considerable demands uponjudicial resources since it can be exceptionally difficult for a court to
review attorney billing information over the life of a complex litigation and make a
determination about whether the time devoted to the litigation was necessary or reasonable."
Swedish I~Iosp. Corp. v. Shalala, l F.3d at 1269-70. ln the context of a large class action
involving tens of thousands of attorney hours, particularly one - as here _ where the awards to
the successful claimants cannot be calculated or distributed until the amount designated for
attorneys’ fees has been set, such an undertaking would likely result "in a substantial delay in
distribution of the common fund to the class." l_d.
31
last September, or the additional hours they will have to devote on behalf of the class "until all of
the Settlement Funds have been distributed in accordance with this Court’s orders." Supp. Filing
at 1. lt also does not take into account class counsel’s out~of-pocket expenditures, which they
now report to be over 818 million. _l_d.
A fee award set at 7.4% of the common fund (i.e., 890,835,000) would come to
less than twice the 850 million lodestar figure supplied by class counsel - a figure that itself is
incomplete because it does not include any of class counsel’s work over the past nine months.
Such a multiplier _ less than two times the lodestar m is unremarkable in common fund cases.
In fact, "multiples ranging up to ‘four are frequently awarded in common fund cases when the
lodestar method is applied."’ Lorazepani & Clorazepate Antitrust Litig., 2003 WL 2203774l, at
*9 (quoting ln re Prudential lns. Co. of Ain. Sales Practices Litig., 148 F.3d 283, 341 (3d Cir.
1998)); §Mje_,e ln re Baan Co. Sec. Litig., 288 F. Supp. 2d at 19~20 (reviewing counsel’s reported
lodestar and finding "that a multiplier of 2.0 or less falls well within a range that is fair and
reasonable"); se_e a_lsg Swedish llosp. Corp. v. Shalala, 1 F.3d at 1263, 1272 (approving fee
award approximately 3.3 times the lodestar amount). Applying a lodestar cross~check, therefore,
confirms that the award sought by class counsel is neither unusual nor unreasonable, in light of
the considerable time and expertise devoted to this case by class counsel.
IV. CONCLUSION
Class counsel have undertaken the immense challenge presented by this action
with the utmost professionalism and integrity, exhibiting skill, diligence, and efficiency in all
aspects of their duties. As noted earlier, they also have committed themselves to devoting
"whatever additional time and effort is necessary going forward to bring the claims and payment
process to a successful conclusion." Mem. at 37; smeg; also Supp. Filing at 1 (noting that class
32
counsel "will continue to devote substantial time on behalf of the Class, until all of the
Settlement Funds have been distributed iii accordance with this Court’s orders"). For the reasons
stated above, class counsel’s updated motion for an award of attorneys’ fees and expenses will be
granted in the full amount requested. An Order consistent with this Opinion will issue this same
day.
SO ORDERED.
PAUL L. FRIEDMAN
DA'l``E: 4_ \ “ `` \ 3 United States District Judge
33