competent to perform the task at hand. However, unlike a client, the court does not negotiate the "terms," i.e., the charges, hours, and services, of the representation. Here, the court has no doubt that class counsel was competent to represent the class in this action; but, without some justification from class counsel as to why the "terms" of its representation are reasonable in the context of this case, the court cannot approve the fee class counsel seeks. To take money from the class and deliver it to the class's attorneys, the court must verify that the facts and complexity of the case justify the amount awarded and that the case warrants the actions taken by counsel in prosecuting it. Class counsel has not provided the court with this justification. Therefore, under the circumstances of this case, the court finds that a fee award of 30% of the fund is unreasonable, and turns to the issue of whether an award equal to 25%, the "bench mark," is appropriate.
The court finds that the "bench mark" award is not appropriate in this case. Rather, based upon the materials submitted by class counsel, the court concludes that this case was not a standard class action lawsuit, but instead an unusually simple one. The court has tried to balance class counsel's reputation as a vigorous advocate in this type of case, and its obvious skill in handling them, against the absence of any evidence of or discussion of the challenges, complexity, novelty, and difficulty of prosecuting the claims herein. In so doing, the court has departed downward from the 25% bench mark to 15% of the common fund, or $ 825,000. It has arrived at this figure by weighing the hours expended by class counsel, evaluating the lodestar, and looking at the relative ease with which settlement was reached. Regrettably, no further guidance was provided by class counsel.
The court notes that associated counsel Schiffrin & Craig requests fees in the amount of $ 93,187.50, as compensation for 289.5 hours of work on this case. See Schiffrin Decl. P 5 and Exh. A. Associated counsel Finkelstein & Associates requests fees in the amount of $ 36,912.50, as compensation for 138.6 hours of work on this case. See Finkelstein Decl. P 10. Thus, associated counsel asserts that its share of the total fee award is $ 129,100, as compensation for a combined total of 428.1 hours. Because the court's analysis is of the total fee award class counsel requests, the court has not done an intensive analysis of associated counsel's asserted fees. However, the court notes that associated counsel's fees do not appear unreasonable, though associated counsel's rates are at the high end of the local legal market.
After deducting the $ 129,100 fee award for associated counsel from the full fee award of $ 825,000, lead counsel Milberg Weiss will receive a fee award of $ 695,900 as compensation for 826.75 hours of work on this case.
The number of hours of work performed by lead counsel on this case is not quite twice the time expended by associated counsel. Yet assuming a net fee award of $ 695,000, lead counsel will receive fees of more than five times that of associated counsel. Hence, comparatively, a 15% fee award generously compensates class counsel for its work.
Although the court has elected to apply the percentage-of-the-fund method of fee calculation in this case, it is instructive to analyze the percentage fee request and the fee award in the context of the lodestar/multiplier method. Class counsel asserts that the legal work performed in this case results in a lodestar of $ 323,626.25. Supp. Mem. at 7. Thus, as class counsel discusses in its Supplemental Memorandum, were the court to use the lodestar/multiplier method, the requested fee of $ 1,650,000 would equate to a 5.10 multiplier, which, as class counsel acknowledges, is "at the high end of the range of multipliers awarded in common fund cases and one that the Court might not readily use." Id. By comparison, a fee award of $ 825,000, an amount equal to 15% of the common fund, results in a multiplier of 2.55, or 2.55 times the lodestar of $ 323,626.25. This is a reasonably high lodestar. See Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d 513, 517 (6th Cir. 1993) (affirming district court's rejection of requested multiplier of 3.3 and use of multiplier of 2). Thus, had the court applied the lodestar/multiplier method to this case, class counsel's fee award quite possibly could have been less than $ 825,000, particularly since the court has no discussion of complexity and no basis by which to conclude that this was anything other than a simple case.
D. Expenses and Costs
Class counsel has modified its cost request to $ 146,172.79. Further, class counsel has submitted additional information regarding these reimbursement requests. Under the "common fund" doctrine, class counsel is entitled to reimbursement of reasonable out-of-pocket expenses and costs in obtaining a settlement.
Vincent v. Hughes Air West, 557 F.2d 759, 769 (9th Cir. 1977).
Class counsel asserts that the bulk of its expenses are charges paid to its primary expert, John Torkelson of Princeton Venture Research, Inc. Mr. Torkelson's charges comprise $ 113,305.99. Class counsel submits the declaration of Mr. Torkelson in support of its requested reimbursement. Mr. Torkelson is the president of Princeton Venture Research, Inc., a company comprised primarily of securities and financial analysts who provide analysis of individual stocks and selected industries to institutional investors and corporate clients. Torkelson Decl. P 3. Mr. Torkelson states that his firm expended 662 hours of work on this case, pursuant to its non-contingent engagement by lead counsel, accumulating fees of $ 111,530 for work performed from January 1, 1994 through April 28, 1995. Id. at P 27. He also claims $ 1,775.99 in other expenses.
Regarding his fees, neither Mr. Torkelson nor class counsel provides the court with a breakdown of the hours expended in work on this case, or with Mr. Torkelson's hourly rates and those of his colleagues. As a result, the court cannot discern what services Mr. Torkelson performed, for what cost, and for what time period, and what services were performed by word processors and support staff. Though the court will concede that experts can be invaluable in prosecuting lawsuits, class counsel here has failed to provide the court with anything indicating the reasonableness of Mr. Torkelson's services and charges under the circumstances of this case. Because the court cannot evaluate the reasonableness of those services in the context of this case it cannot approve class counsel's requested reimbursement of $ 111,530 in expenses.
Mr. Torkelson also states in his declaration that his firm incurred expenses in the amount of $ 1,775.99 in duplication, computer information retrieval, telephone and telex, and postage and shipping expenses. Id. at P 28. Though again class counsel has provided the court only with general totals, and no detailed information about these expenses, in light of the relatively small amount requested for what was apparently more than one year's work, the court approves this request. The court orders lead counsel reimbursed in the amount of $ 1,775.99 for expenses incurred by Mr. Torkelson and Princeton Venture Research, Inc.
Class counsel states that the remainder of the amount requested for reimbursement for expenses for experts, consultants, and investigators ( $ 4,125.00) was for the "consulting services of an ex-employee of Brooktree who has requested anonymity." Supp. Mem. at 3, n.1. Without further information, the opportunity to provide which has already once been granted, the court cannot evaluate the reasonableness of this expenditure, and thus cannot award this amount to class counsel. For example, class counsel fails to demonstrate to the court that the information for which this anonymous consultant was paid was not information that could have been obtained at no cost through the use of a subpoena. Nor does class counsel detail the effort and time the informant expended in accumulating this $ 4,125 fee. The court does not know whether this figure is a negotiated fee for one hour of minimal information, or if the figure comprises hourly work done at $ 50 per hour. Therefore, the total amount of expenses and costs awarded to class counsel for experts, consultants, and investigators is $ 1,175.99.
In addition to seeking reimbursement for expenses for experts, consultants, and investigators, class counsel seeks reimbursement for photocopying expenses in the amount of $ 7,389.77. In his declaration accompanying the Supplemental Memorandum, Mr. Park states that $ 3,954.37 is the amount lead counsel Milberg Weiss paid to outside vendors for the cost of copies of documents produced to lead counsel by Defendants and third parties, and the remaining sum is lead counsel's internal cost of photocopying over 17,000 pages of material at $ 0.20 per page. The court orders class counsel reimbursed in the amount of $ 7,389.77 for photocopying expenses.
Finally, class counsel apparently seeks reimbursement for an additional $ 20,166.07 in expenses and costs. In its initial moving papers, without discussion, class counsel sought $ 18,942.46 in expenses and costs for postage ( $ 134.79), telephone, telex and facsimile ( $ 430.69), messenger, courier and Federal Express ( $ 2,431.00), special secretarial and word processing services ( $ 2,081.03), filing and legal fees ( $ 4,967.03), and on-line legal research services ( $ 8,897.92). See Park Decl. (10/03/95) P 4. However, in neither its initial moving papers nor its supplemental submissions has class counsel presented argument or evidence with respect to these expenses, and in its supplemental materials class counsel makes no reference to them at all. Therefore, the court cannot evaluate the reasonableness of these expenses under the circumstances of this case. As a result, and after already permitting class counsel to submit supplemental materials to explain its request for reimbursement of expenses, the court cannot award lead counsel reimbursement for these expenses.
Based on the foregoing, IT IS HEREBY ORDERED:
1. Applying the percentage-of-the-fund method of fee calculation in common fund cases, class counsel is awarded $ 825,000 in attorneys' fees, an amount equal to 15% of the $ 5,500,000 settlement fund;
2. Lead counsel Milberg Weiss Bershad Hynes & Lerach is awarded $ 9,165.76 in expenses and costs, an amount comprised of $ 1,775.99 in expenses for experts, consultants, and investigators for Mr. John Torkelson and Princeton Venture Research, Inc., and $ 7,389.77 for photocopying expenses; and
3. In accordance with this court's finding at the October 10, 1995, hearing that associated counsel Schiffrin & Craig's requested reimbursement of $ 1,185.96 in expenses was minimal and reasonable, Schiffrin & Craig is awarded that amount.
IT IS SO ORDERED.
Judith N. Keep, Chief Judge
United States District Court