Dennis v. JPMorgan Chase & Co.

|| USDC SDNY

UNITED STATES DISTRICT COURT _ | DOCUMENT □

SOUTHERN DISTRICT OF NEW YORK a ELECTRONICALLY FILED

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RICHARD DENNIS, et al., - 4 DATE FILED: 5- 25 “02.3

Plaintiffs,

-against- 16-cv-6496 (LAK)

JPMORGAN CHASE & CO., et al.,

Defendants.

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MEMORANDUM AND ORDER

LEWIS A. KAPLAN, District Judge.

This is an antitrust class action that has been litigated for nearly seven years. On

November 1, 2022, the Court approved eight proposed class action settlements, creating a common

fund of $185,875,000, Lead counsel Lovell Stewart Halebian Jacobson LLP (“Lovell Stewart”) and

Lowey Dannenberg, P.C. (“Lowey Dannenberg,” and together with Lovell Stewart, “Class

Counsel”) now seek attorneys’ fees of $47,218,750, or 25.4 percent of the settlement common fund,

and litigation expenses of $845,471.57, to be split among themselves and another law firm, Berman

Tabacco (“Berman”), with which Class Counsel has a fee sharing agreement.’ Familiarity with all

prior proceedings is assumed,

L Attorneys’ Fees

Federal Rule of Civil Procedure 23(h) allows the Court to “award reasonable

Dkt 555, at 16 0.9, 20.

attorney’s fees and nontaxable costs” in a certified class action. What is “reasonable” is left to the

discretion of the Court, which is “intimately familiar with the nuances of the case.” In exercising

that discretion, the Court acts as a fiduciary for the class, which it must protect from excessive

awards? Counsel bear the burden of establishing the reasonableness of their requested fee award.‘

The Court may evaluate the reasonableness of a fee request using either the

percentage of the fund obtained for the class or the lodestar method.’ The latter, which the Court

employs here, requires the Court to compute a reasonable lodestar amount. To do this, the Court

first ascertains “the number of hours reasonably billed to the class,” and then multiplies that figure

by “an appropriate hourly rate.”* That figure then may be increased by applying an appropriate

multiplier. The Court’s analysis is guided by the six factors that the Second Circuit described in

Goldberger y. Integrated Resources: (1) counsel’s time and labor, (2) the litigation’s magnitude and

complexity, (3) the risk of the litigation, (4) the quality of representation, (5) the requested fee in

relation to the settlement, and (6) public policy considerations.’

Counsel submit a proposed lodestar of $29,908,595.15 based on 53,814.49 hours of

Inve Bolar Pharm. Co. Sec. Litig., 966 F.2d 731, 732 (2d Cir. 1992) (per curiam).

City of Detroit v. Grinell Corp., 560 F.2d 1093, 1099 (2d Cir. 1977), abrogated on other

grounds by Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir, 2000).

Cruz v. Local Union No. 3 of Int'l Bhd. Of Ele. Workers, 34 F.3d 1148, 1160 (2d Cir. 1994).

See Wal-Mart Stores, Inc. v. Visa U.S.A, Inc., 396 F.3d 96, 121 (2d Cir, 2005).

Goldberger, 209 F.3d at 47.

id. at 50.

fee compensable work by many individuals, including lawyers, paralegals, and analysts.* Counsel

based their calculation on the timekeepers’ historic hourly rates and capped the hourly rates for

paralegals at $200 per hour and for first-level document review at $350 per hour.” Counsel provided

the Court with information including (1) each timekeeper’s hours, tasks, and historic hourly rates,

(2) the categories of work for which compensation is sought, (3) biographical information for the

individuals for whom compensation is sought, and (4) additional facts supporting the reasonableness

of the hourly rates, including market rates for similar professionals.'° This information revealed that

counsel seek compensation for time billed by 79 attorneys,'! ten paralegals, and four “analysts.”

A, The Hourly Rates

As an initial matter, the Court finds that counsel have not shown that it was

appropriate to include the hourly rates of the four “analysts” in the calculation of the lodestar.

Collectively, these analysts — comprising a “financial analyst,” “investigator researcher,”

“derivatives expert,” and “analyst” — billed approximately 3,027.5 hours at historic hourly rates

ranging from $165 to $545 per hour, which, at the higher end, is more than many of the firms’

associates were billed out at. Counsel have included a total of $1,054,236.75 in their fee

&

Dkt 555, at 17.

fd. at 17, 21-22,

20

See Dkt 555; Dkt 557-1; Dkt 562; Dkt 563.

ik

This group of attommeys included 27 partners, two counsel, 44 associates, one project

attorney, and five staff attorneys.

i2

See Dkt 555; Dkt 557-1; Dkt 562; Dkt 563.

compensable lodestar for hours billed by the four “analysts,” the vast majority of which were billed

by counsel’s “derivatives expert.”

Hourly rates of non-lawyers may be included in the lodestar “if... consistent with

market rates and practices.”"* Counsel have not provided data on the hourly rates charged by other

firms for such personnel, assuming that other firms charge for them on an hourly basis. Nor have

they furnished any information regarding the practices of the Bar concerning “analysts,”

“investigator researchers,” or “derivatives experts.” Indeed, the work of these types of

professionals, “like that of others ‘whose labor contributes to the work product,’ is likely “included

in calculation of the lawyers’ hourly rates,’ as ordinarily is true of other overhead costs like rent,

firm administrative staff, and the like.”"* Accordingly, the Court will not include the hours billed

by the four analysts in the lodestar calculation.

The Court finds that the hourly rates for the remaining timekeepers — the attorneys,

staff attorneys, project attorney, and paralegals — were appropriate.

B. Hours Billed

The Court now addresses whether the number of hours for which counsel request

compensation is reasonable. Removing the hours billed by the four analysts, counsel seek

compensation for approximately 50,787 hours of work.

See Missourt v. Jenkins by Agyei, 491 U.S. 274, 286 (1989); U.S. Football League v. Nat'l

Football League, 887 F.2d 408, 416 (2d Cir. 1989).

Rudman v. CHC Grp. Lid., No. 15-cv-3773 (LAK), 2018 WL 3594828, at *5 (S.D.N_Y. July

24, 2018) (quoting W. Virginia Univ. Hosps. v. Casey, 499 U.S. 83, 99 (1991), superseded

by statute, Landgrafv. USI Film Preds., et al., 511 U.S. 244 (1994)).

The Court notes that counsel appropriately expended significant time and labor

litigating this class action, Over the course of approximately six years, they have, among other

things, amended the complaint twice, opposed five motions to dismiss and one motion for

reconsideration, conducted at least 70 meet and confers with defendants’ counsel regarding

discovery, received and reviewed more than 2.4 million documents produced by defendants,

obtained certification of the class, and negotiated eight separate settlements involving twelve

different banks.”

Nevertheless, the sheer amount of hours billed, particularly with respect to document

review and other discovery, indicates a certain amount of duplication and inefficiencies in the

timekeeping. Even after removing the hours billed by counse!’s four analysts, counsel assert that

they spent approximately 16,937.1 hours on document review, 3,614.8 hours on discovery motion

practice, and 5,818.4 hours on “other discovery,” accounting for the majority of the 50,787 hours

bilied."* Though discovery in this case was substantial, the Court finds these numbers to be

excessive and redundant.

The Court finds that the simplest way to account for the inefficiencies and

redundancy of the timekeeping in these three categories is to employ a 15 percent across the board

reduction of counsel’s lodestar, which the Court will employ after the reductions described above

regarding hourly rates are rendered.'? Applying all of these reductions, counsel’s revised aggregate

See Dkt 555, at 22-23.

16

See Dkt 555; Dkt 557-1; Dkt 562; Dkt 563.

\7

See Kirsch, 148 F.3d at 173 (“Hours that are ‘excessive, redundant, or otherwise

unnecessary,’ are to be excluded, and in dealing with such surplusage, the court has

discretion simply to deduct a reasonable percentage of the number of hours claimed ‘as a

lodestar is $24,526,204.64.

Cc. Multiplier

The Court finds that a multiplier of 1.5 is reasonable here, which is well within the

range of multipliers typically approved in this Circuit."* Such a multiplier amply accounts for the

time value of money and the nearly seven-year delay in counsel’s payment. Additionally, a

multiplier of 1.5 adequately accounts for the risk of this litigation, the complexity of the issues, the

contingent nature of the engagement, the skill of the attorneys on both sides, as well as the efforts

of the many support staff who contributed to counsel’s success, After approximately six years of

hard-fought litigation, counsel obtained eight class action settlements with twelve settling

defendants, creating a common fund of $185,875,000.'° This was a good result for the class and

counsel deserve to be compensated adequately.”

Applying the 1.5 multiplier to the Court’s revised aggregate lodestar, counsel’s fee

practical means of trimming fat from a fee application.*” (citation omitted); Lunday v. City

of Albany, 42 F.3d 131, 134 (2d Cir. 1994) (“We do not require that the court set forth

item-by-item findings concerning what may be countless objections to individual billing

items.”).

18

See, e.g, in re LIBOR-Based Fin, Instruments Antitrust Litig., No. 11-cv-5450, 2018 WL

3863445, at *4 (SDNY. Aug. 14, 2018) (The mean multiplier in this Circuit is

approximately 1.55, with multipliers in antitrust and securities cases recently averaging 1.77

and 1.43, respectively.”); see also Theodore Eisenberg ef al., Attorneys’ Fees in Class

Actions: 2009-2013, 92 N.Y.U. L. Rev. 937, 951 (2017) (average lodestar multiplier of 1.61

in fifteen different antitrust class actions studied during 2009-2013).

15

Dkt 555, at 10.

20

See Pillsbury Co. v. Conboy, 459 U.S. 248, 262-63 (1983) “This Court has emphasized the

importance of the private action as a means of furthering the policy goals of certain federal

regulatory statutes, including the federal antitrust laws.”).

award is $36,789,306.96. Counsel request that the fee award be allocated as follows: 41.82% to

Lovell Stewart, 41.82% to Lowey Dannenberg, and 16.36% to Berman.”! In view of counsel’s

supplemental briefing on this issue and the opinion of counsel’s expert, the Court finds that this

constitutes an appropriate percentage allocation of the total attorneys’ fees.”” Accordingly, the Court

allocates the total fee award of $36,789,306.96 as follows: $15,385,288.17 to Lovell Stewart,

$15,385,288.17 to Lowey Dannenberg, and $6,018,730.62 to Berman,

IT. Litigation Expenses

Counsel seek also reimbursement for $845,471.57 in litigation expenses.” The

majority of the expenses are attributable to counsel’s retained experts and consultants and to

document discovery and computer research costs. The Court finds nothing objectionable and grants

this request."

21

See Dkt 620, at 7 (“If the Court [reduces the overall attorneys’ fee from $47,218,750], then

Class Counsel respectfully requests that the percentages proposed above --- 41.82% to

Lovell Stewart, 41.82% to Lowey Dannenberg, and 16.36% to Berman Tabacco --- still

constitute an appropriate percentage allocation of the total attorneys’ fees.”).

22

See Dkt 620, at 8-10; id. Ex. 2 (Hyland Decl.).

23

See Dkt 555, at 37.

24

See In re Platinum & Palladium Commodities Litig., No. 10-cv-3617, 2015 WL 4560206,

at *5 (S.D.N_Y. July 7, 2015) (quoting In re Currency Conversion Fee Antitrust Litig., MDL.

No. 1409 (WHP), 2012 WL 3878825, *2 (S.D.N.Y. Aug. 22, 2012)) (“Attorneys may be

compensated for reasonable out-of-pocket expenses incurred and customarily charged to

their clients.”’)

Conclusion

Lead counsel’s application for attorneys’ fees is granted in accordance with the

following: lead counsel are awarded $36,789,306.96 in attorneys’ fees, to be allocated as set forth

above, and $845,471.57 in expenses. The Clerk shall terminate Dkt 554.

SO ORDERED.

Dated: May 25, 2023

United States District Judge