Plaintiffs' attorneys “are entitled to reimbursement of those reasonable and necessary out-of-pocket expenses incurred in the course of activities that benefitted the class.”
How later courts described this case
- Plaintiffs' attorneys “are entitled to reimbursement of those reasonable and necessary out-of-pocket expenses incurred in the course of activities that benefitted the class.”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
JOHANA COLON, et al.,
Plaintiff,
V. CASE NO. 8:22-cv-888-TPB-TGW
KEVIN G. JOHNSON, ef al.,
Defendants.
/
REPORT AND RECOMMENDATION
The plaintiffs filed an Unopposed Motion for Final Approval of
Class Action Settlement (Doc. 290) and an Unopposed Motion for
Attorneys’ Fees, Costs and Administrative Expenses (Doc. 283). Both
motions were referred to me. Upon consideration of the submissions and the
Court’s Order Granting Preliminary Approval of Class Action Settlement, I
recommend that these motions be granted and, accordingly, that the court
give final approval of the Class Action Settlement.
I.
In December 2015, the Advanced Diagnostic Group Employee
Stock Ownership Plan (ESOP) was established. The plaintiffs allege that the
defendants violated ERISA throughout the entire lifespan of the ESOP,
leading to substantial losses to the intended beneficiaries of the ESOP. The
proposed settlement class was estimated to be 185 members.
The parties reached a Settlement Agreement providing for $19
million dollars to be deposited into a Qualified Settlement Fund
(“Settlement”) (see Doc. 267-1). It was agreed that this sum would be
reduced by attorneys’ fees and litigation costs and expenses (id.).
The plaintiffs filed an Unopposed Motion for Preliminary
Approval of this Class Action Settlement, which was referred to me (Doc.
274). As detailed in my Report and Recommendation, the plaintiffs: (1)
satisfied the requirements to provisionally certify the proposed settlement
class under Rule 23 of the Federal Rules of Civil Procedure; (2) established
that the Settlement is provisionally adequate, fair and reasonable; and (3)
prepared a proposed Notice that is adequate (Doc. 278).
United States District Judge Tom Barber adopted the Report
and Recommendation and issued an Order granting Preliminary Approval of
Class Action Settlement (Doc. 280). U.S. District Judge Barber found that,
on a preliminary basis,
(1) the settlement is fair, reasonable, and
adequate, and within the range of possible
approval; (2) the settlement has been negotiated in
good-faith at arms-length between experienced
attorneys familiar with the legal and factual issues
of this case and facilitated by an experienced
mediator following substantial discovery; (3) the
form and method of notice of the settlement of the
final fairness hearing is appropriate; and (4) the
settlement meets all applicable requirements of
law, including Federal Rule of Civil Procedure 23
and applicable Eleventh Circuit precedents.
Accordingly, the Court preliminarily approves the
settlement agreement in its entirety.
(id., pp. 1-2). Further, the court appointed Analytics Consulting LLC, as the
settlement administrator, and Fiduciary Counselors as the independent
fiduciary to review the proposed settlement, as required by ERISA.
The Notice of the proposed Settlement was mailed to class
members on or before July 10, 2024 (Doc. 292). Notably, “[oJut of 185
Settlement Notices that were mailed, none were ultimately undeliverable”
(id., (emphasis added).
The deadline to submit objections was September 18, 2024.
Significantly, no objections were received as to any aspect of the proposed
Settlement as of the deadline.
Additionally, Fiduciary Counselors, which evaluated the
proposed Settlement, issued a Report in which it opined, among other
favorable opinions, that
[t]he Settlement terms, including the scope of the
release of claims, the amount of cash received by
the Plan and the amount of any attorneys’ fee
award or any other sums to be paid from the
recovery, are reasonable in light of the Plan’s
likelihood of full recovery, the risks and costs of
litigation, and the value of claims forgone.
(Doc. 291-1, p. 1).
The Plaintiffs’ Unopposed Motion for Attorneys’ Fees, Costs
and Administrative Expenses (Doc. 283) and the Unopposed Motion for
Final Approval of Class Action Settlement (Doc. 290) are timely filed. They
were referred to me.
I subsequently held a Final Fairness Hearing. At the outset of
the hearing, I asked if there were any objectors that wished to be heard, and
there were none. Additionally, counsel for the parties confirmed that no
objection was received to the settlement as of the objection deadline.
I.
A. As indicated, the Settlement Agreement was preliminarily
approved in its entirety as “fair, reasonable and adequate” (Doc. 280, pp. 1-
2). There has been no change in circumstances that warrant a different
finding.
To the contrary, the lack of objection from class members (or
anyone else, for that matter) supports the reasonableness of the Settlement,
especially here, where the Notice of Settlement was delivered successfully
to all class members. See In re Equifax Inc. Customer Data Sec. Breach
Litig., 999 F.3d 1247, 1278 (11th Cir. 2021) (A factor in determining
approval of a class settlement is whether there are any substantial objections
by class members or other parties to the settlement terms); Venerus v. Avis
Budget Car Rental, LLC, 674 F. Supp. 3d 1107, 1113 (M.D. Fla. 2023)
(same). Final approval of the Settlement is also buttressed by the opinion of
the independent fiduciary that the Settlement is reasonable. I therefore
recommend final approval of the Settlement.
B. The plaintiffs also request an award of $6,333,333.00 in
attorneys’ fees, which is equal to one-third of the Gross Settlement Fund.
See In re Equifax Inc. Customer Data Sec. Breach Litig., supra, 999 F.3d at
1278 (In common fund settlements, an attorney's fee award “shall be based
upon a reasonable percentage of the fund established for the benefit of the
class.”). The court, in preliminarily approving the Settlement, noted that
Class Counsel would request up to one-third of the Gross Settlement amount
as attorneys’ fees (Doc. 267-1, 1.3).
As the plaintiffs state, “[o]ne third [of the Settlement Fund] is
the percentage typically awarded in complex ERISA cases ...” (Doc. 290,
pp. 17-18; see also Doc. 283, pp. 2-3 & n.2). Furthermore, counsel asserts
that, “[i]n light of the outstanding recovery achieved on behalf of Class
Members, the extraordinary risk and investment made by Class Counsel, and
the exceptional skill required to achieve this favorable outcome on behalf of
Class Members, Class Counsel’s requested one-third fee is reasonable under
all applicable Camden factors and should be awarded” in this case (Doc. 283,
p. 18).” I agree.
Thus, Class Counsel have “invested more than 5,000 hours” in
this case, and they anticipate that 100-200 additional hours of legal work will
be necessary to fulfill their obligations (Doc. 283, pp. 6-7). Class Counsel’s
work is detailed in my Report and Recommendation (see Doc. 278).
Furthermore, as a contingency case, Class Counsel clearly
accepted a significant risk in litigating this matter (Doc. 283, pp. 13-14). Not
only have Class Counsel not received payment for their efforts, they
advanced expenses exceeding $600,000.00. See In re Equifax Inc. Customer
Data Sec. Breach Litig., supra, 999 F.3d at 1278 (considering whether it is a
contingency case and the economics involved in prosecuting a class action
in determining the reasonableness of attorneys’ fees).
Additionally, the absence of objections to the requested
attorneys’ fees favors granting the award. See id.; Venerus v. Avis Budget
Car Rental, LLC, 674 F. Supp. 3d 1107, 1113 (M.D. Fla. 2023).
“T note that the requested attomeys” fees amount roughly to a lodestar multiplier of 1.6.
See Goldberger v. Integrated Res., Inc., 209 F.3d 43, 50 (2d Cir. 2000) (The lodestar
remains useful as a “cross check” on the reasonableness of the requested percentage.).
This lodestar is substantially less than the typical multipliers of 2.5 to 4 in class action
cases (Doc. 283, p. 11, n. 6). See Smith v. Costa Del Mar, Inc., 3:18-cv-101 1-TJC-JRK;
2021 WL 4295282 at *16 (listing cases).
In sum, there is no apparent circumstance that renders
unreasonable the requested attorneys’ fees award of $6,333,333.00.
Accordingly, I recommend that Class Counsel be awarded the requested
attorneys’ fees.
C. Class Counsel also seeks reimbursement of litigation
expenses of $615,148.25 and payment of $12,202.00 to Analytics
Consulting, LLC (Doc. 283, p. 20).
Class Counsel Jennifer K. Lee itemized in her declaration the
categories of expenses incurred in this case (Doc. 284, p. 5). These expenses
are typically incurred during litigation, except for bankruptcy counsel and
financial data subscriptions, both of which were appropriate in this case (see
id.). The largest category of expenses was expert fees, which total
$509,156.05. Considering the complexity of this case, and that Class
Counsel had to advance the funds for all these expenses, I have no reason
think any expense was unnecessary or that the amounts were excessive.
Therefore, I recommend the court find that the expenses
incurred were reasonable and, accordingly, that Class Counsel receive
reimbursement from the Settlement Fund. See Waters v. Int'l Precious
Metals Corp., 190 F.3d 1291, 1298 (11th Cir. 1999) (Plaintiffs' attorneys “are
entitled to reimbursement of those reasonable and necessary out-of-pocket
expenses incurred in the course of activities that benefitted the class.”).
Finally, the plaintiffs request payment of $12,202.00 to
Analytics Consulting, LLC, the Settlement Administrator. The Court
appointed Analytics Consulting, LLC, as the Settlement Administrator (Doc.
280, p. 3). There is no apparent basis to conclude that the requested fee of
$12,202.00 is unreasonable, especially considering its successful delivery of
the proposed Notices of Settlement.
In sum, the categories of litigation expenses are appropriate for
this case, and there is no apparent reason to find the amounts are
unreasonable. Accordingly, I recommend that Class Counsel be reimbursed
litigation expenses totaling $615,148.25 and that Analytics Consulting be
paid its fee of $12,202.00.
Il.
For the foregoing reasons, the evidence satisfies the legal
requirements for final approval of the Settlement and the requested
attorneys’ fees. I therefore recommend that the Unopposed Motion for Final
Approval of Class Action Settlement (Doc. 290) and the Unopposed Motion
for Attorneys’ Fees, Costs and Administrative Expenses (Doc. 283) be
granted in their entirety.
The plaintiffs have filed a proposed Order Granting Final
Approval of Class Action Settlement (Doc. 290-1), the contents of which are
acceptable to all parties.
Respectfully submitted,
Ptemee 5) Wian\
THOMAS G. WILSON
UNITED STATES MAGISTRATE JUDGE
DATED: DECEMBER! *_, 2024
NOTICE TO PARTIES
The parties have fourteen days from the date they are served a
copy of this report to file written objections to this report’s proposed findings
and recommendations or to seek an extension of the fourteen-day deadline
to file written objections. 28 U.S.C. 636(b)(1)(C). Under 28 U.S.C.
636(b)(1), a party’s failure to object to this report’s proposed findings and
recommendations waives that party’s right to challenge on appeal the district
court’s order adopting this report’s unobjected-to factual findings and legal
conclusions.