Activision Settlement Nets Lead Counsel 22.7-24.5% Of Common Benefit Fee Percentage.
In In re Activision Blizzard, Inc. Stockholder Litigation, Consolidated C.A. No. 8885-VCL (Del. Ch. Ct. May 21, 2015 revised), Delaware Chancellor Travis Laster approved a settlement, awarded fees to Lead Counsel, and awarded an incentive payment to Plaintiff from the fees in a hotly contested class/derivative shareholder action. The settlement was for $275 million (monetary) and the nonmonetary benefits were pegged at $5-10 million. The settlement agreement had a “clear sailing clause” by which the defense would not contest a fee request of $72 million. The settlement was brokered by former U.S. District Judge Layn Phillips and was done one month before a scheduled trial. Under the circumstances, Chancellor Lancaster found that $72 million was reasonable given that it was 22.7%-$24.6% of the total benefit, with Delaware law approving of a 22.5%-25% percentage method when a case is close to trial. Lead Plaintiff was also allowed a $50,000 “incentive” payment out of the fee award. For those of you who practice in the corporative governance/shareholder litigation area, this decision has a very eloquent criticism of the contemporaneous ownership requirement (although the Chancellor followed it), a good discussion of the differences between direct/derivative/dual/personal claims, and a nice summary of settlement fairness factors used by Delaware courts.
U.S. Magistrate Judge Trims Fees Substantially In FLSA Restaurant Settlement.
U.S. Magistrate Judge Gary Brown, in Flores v. Mamma Lombardi’s of Holbrook, No. 12-cv-3532 (E.D.N.Y.), approved a $1.375 million FLSA restaurant overtime wage class action settlement. However, he rejected awarding class counsel the requested one-third of the settlement amount ($458,333), scoffing at the suggestion that district courts had to be constrained by a Second Circuit trend to award this one-third percentage number. Instead, Magistrate Judge Brown used the lodestar approach, reducing the fee request by about 80% down to an awarded $93,000 in fees based on trimming the requested hourly rates and culling hours deemed to be unnecessary/inappropriate/antithetical to the overall settlement.
MDL Fee Trends Surveyed By Two Blogging Indianapolis Attorneys.
Our friends at NALFA have posted an interesting legal blog by Alicia M. Raines and Jennifer R. Tudor of the Indianapolis office of Barnes & Thornburg LLP. They have posted on an article on some trends regarding fee awards in Multidistrict Litigation (MDL) cases, the highlights of which we summarize this way: (1) common fund or common benefit theories are most frequently used as a basis for fee entitlement; (2) a “blended approach”—using the percentage method primarily and then checking it against the lodestar method—seems to be the dominant approach, although this is not uniform among various courts; and (3) appointment of a special master is the favorite mechanism for determining the amount of fees/expenses (generally with the master making recommendations for approval by a district judge).