The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge
ORDER AWARDING ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES
Currently before the Court is Lead Plaintiff's Application for Award of Attorneys' Fees and Reimbursement of Expenses. [Doc. No. 132.] On October 4, 2010, the Court held a hearing on the instant motion in conjunction with a motion for final approval of settlement and the plan of allocation of settlement proceeds. No objections were made to the terms of the settlement, including the terms for award of attorneys' fees and reimbursement of expenses. For the reasons stated herein, the Court GRANTS the application for award of attorneys' fees and reimbursement of expenses.
This action arises from alleged misconduct by Defendant Leap Wireless ("Leap") and certain individual officers and directors of Leap. In April 2003, Leap filed for bankruptcy under Chapter 11, reorganized, and emerged in August 2004. On November 9, 2007, Leap announced that it would be restating its financial statements for fiscal years 2004-2006 and the first two quarters of 2007. The present action was triggered by Leap's restatement of its financial results, including the Company's reported net profits, and the price decline of Leap's common stock that occurred after the restatement was disclosed to investors.
On November 27, 2007, four class actions were filed against defendants in this Court, alleging violations of the federal securities laws. Two of the actions were voluntarily dismissed. On May 22, 2008, the Court consolidated the two present actions and appointed New Jersey Carpenters Pension and Benefit Funds as Lead Plaintiff ("Plaintiff"), Schoengold Sporn Laitman & Lometti, P.C. as Lead Counsel, and Glancy Binkow as Liason Counsel. On April 30, 2010, the Court substituted Cohen Milstein Sellers & Toll PLLC as Lead Counsel.
On July 7, 2008, Plaintiff filed the Consolidated Class Action Complaint. On August 28, 2008, Defendants filed a motion to dismiss. This Court granted the motion to dismiss, but granted Plaintiff leave to amend.
On March 10, 2009, Plaintiff filed the operative Second Amended Consolidated Complaint. Defendants collectively filed a motion to dismiss a second time. Following the briefing of the second motion to dismiss, and prior to the motion's scheduled hearing date, the parties engaged in extensive settlement negotiations and ultimately agreed to a resolution of this action. Over several weeks, the parties discussed and negotiated several drafts of the stipulation of settlement, which was presented to the court for preliminary approval. On March 24, 2010, the Court granted preliminary approval of the settlement.
Requested Fees and Expenses
Plaintiff's counsel has negotiated a class settlement consisting of $13,750,000 in cash; the settlement fund has already been paid and is earning interest for the class. For their efforts in achieving this result, Plaintiff's counsel seeks attorneys' fees of 25% of the settlement fund, which is $13,750,000, plus the interest earned thereon for the same time period and at the same rate as that earned on the settlement fund until the fee is paid. Counsel also requests reimbursement of out-of-pocket expenses in the amount of $112,715.16.
Upon motion in a class action, the court "may award reasonable attorney fees and nontaxable costs authorized by law or by the parties' agreement.." Fed. R. Civ. P. 23(h). In "common fund" cases such as this one, the Ninth Circuit has stated that "the district court has discretion to use either a percentage or lodestar method" to determine what constitutes a reasonable fee. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998). Under the percentage method, the Ninth Circuit has established 25 percent of the common fund as a "benchmark" for what constitutes a reasonable fee. Id.; Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990). Courts have found that a lodestar analysis is not necessary when the requested fee is within the accepted benchmark. Craft v. County of San Bernadino, 2008 U.S. Dist. LEXIS 27526, at *24 (C.D. Cal. April 1, 2008) ("A lodestar cross-check is not required in this circuit."). Under the percentage method, "the court simply awards the attorneys a percentage of the fund sufficient to provide class counsel with a reasonable fee." Hanlon, 150 F.3d at 1029.
Here, Plaintiff's counsel obtained a $13.75 million settlement without needlessly risking further dismissal of claims, and without the necessity of conducting further fact discovery, expert discovery, class certification and summary judgment motions, trial and further appeals. In addition, the settlement amount approaches the damages Plaintiff's expert deemed recoverable. The fees are also reasonable in light of the skill and effort required to reach the settlement. Here, both parties were represented by competent and experienced counsel. Lead Counsel has extensive experience in litigating securities class actions, and Defendants were represented by two law firms with nationwide and international reputations for providing thorough and competent representation. Lead Counsel obtained the settlement only after extensive investigations, research, briefing and arguments ...