The opinion of the court was delivered by: WILLIAMS
Plaintiffs brought this class action against Defendant Atlantic Richfield Company ("ARCO") alleging violations of § 201 of the Economic Stabilization Act ("ESA") based on ARCO's interaffiliate pricing policies and noncompliance with regulations governing import fees and duties. After trial and various appeals, the parties agreed to a settlement which this Court approved in February of 1994. Class Counsel now move for: 1) an award of attorneys fees; 2) reimbursement of expenses and; 3) an incentive award to the named class representative. Based on the following, the Court GRANTS Class Counsel $ 19,180,803.07 in fees and $ 2,406,606.90 in expenses. The Court also GRANTS Don Van Vranken, the named class representative, $ 50,000 for his efforts during this litigation.
Plaintiffs commenced this case on March 23, 1979, although the litigation did not begin in earnest until Plaintiffs filed their Second Amended Complaint in 1985 following the Court's lifting of the stay imposed during Department of Energy ("DOE") compliance proceedings. The Second Amended Complaint alleged four causes of action based on ARCO's interaffiliate pricing policies and violations of DOE regulations governing import fees and costs.
After many years of litigation, the case finally went to trial in June of 1992. The jury found for ARCO on the interaffiliate pricing claim, but for Plaintiffs on the import fees and duties claims. The jury awarded Plaintiffs $ 22,800,000 in damages. After the Court added pre and post-judgment interest, the total award amounted to $ 67,548,713.26.
ARCO appealed the verdict to both the Ninth and Federal Circuit Courts of Appeal. Soon thereafter, Class Counsel petitioned for statutory fees under section 210(b) of the ESA. While the appeals and fee petition were still pending, the parties agreed to settle the case.
Under the terms of the settlement, ARCO agreed to pay the class the full amount of the judgment, $ 67,548,713.26, plus taxable costs of $ 49,500. In addition, ARCO added $ 9,125,000 to the fund as settlement for Class Counsel's statutory fee application. Thus, the total settlement fund became $ 76,723,213.26. In exchange, ARCO received a reverter of up to $ 9,000,000 of any unclaimed money left in the fund after distribution to Class Counsel and to class members. The Court granted its preliminary approval for this settlement in December of 1994 and final approval in February of 1995.
Now, Class Counsel has filed an application for attorneys' fees seeking an award of 40 percent of the fund, or $ 30,689,285.30, as compensation for their efforts during this case. Class Counsel also requests $ 2,406,606.90 as reimbursement for litigation expenses and $ 100,000 as an incentive award to Don Van Vranken, the named class representative.
The Court has received numerous oppositions to Class Counsel's fee application, both from attorneys representing groups of class members, as well as from individual class members themselves.
Class Counsel characterizes its proposed 40 percent fee as "reasonable compensation" for its efforts in a case that "taxed [their] personnel and economic resources almost to the breaking point." In response, various class members and their attorneys have labelled Class Counsel's requested fee as "astounding," "unreasonable," "clearly excessive" and "way too much." See Objection of Class Member Thrifty Oil Co. To Class Counsel's Motion for an Aggregate Award of Attorneys' Fees; Memorandum in Support of the Notice of Opposition of the Class Members Comprising the ARCO Jobbers Group; Letter from Class Member Pellett Petroleum, Inc.; Letter from Class Members G. and Elaine Swank.
In considering Class Counsel's fee application, the Court must first determine which method to employ in calculating the appropriate fees, the lodestar method or the percentage of the fund method. Thereafter, the Court must evaluate the specific circumstances of this case to determine what amount of fees should be awarded.
A. Method of Calculating Fees
In common fund cases such as this, the Ninth Circuit allows a district court to employ either the percentage of the fund method or the lodestar method when awarding fees. In re Washington Pub. Power Supply Systems Securities Litigation, 19 F.3d 1291, 1294 n.2 (9th Cir. 1994). The Ninth Circuit has not expressed any explicit preference for either method so long as the ultimate fee award is reasonable under the circumstances. Id. at 1296; Florida v. Dunne, 915 F.2d 542, 545 (9th Cir. 1990). The decision of which method to employ is within the sound discretion of the district court. See In re Washington Public Power, 19 F.3d at 1296 ("in common fund cases, no presumption in favor of either the percentage or the lodestar method encumbers the district court's discretion to choose one or the other").
Here, the Court will employ both methods to arrive at a reasonable fee under the circumstances. First, the Court will calculate a rough estimate of an appropriate fee by employing the percentage of the fund method. Thereafter, the Court will use the ...