# Petition for Writ of Certiorari — General Motors Corp. v. Skelton > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_1357%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1989 - **Citation:** 493 U.S. 810 ## Text BS No. — Supreitia Court, U.S, 1848 FILED ) MAY 12 1808 JOSEPH F. SPANIOL, JR, CLERK In the Supreme Court of the United States OCTOBER TERM, 1988 GENERAL MOTORS CORPORATION, PETITIONER v. ARLIE GLEN SKELTON, ET AL., RESPONDENTS PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Louis H. LINDEMAN, JR. LEE A. SCHUTZMAN General Motors Corporation 8031 West Grand Boulevard Detroit, Michigan 48202 (313) 974-1672 STEPHEN M. SHAPIRO Counsel of Record KENNETH S. GELLER JOHN E. MUENCH MARK I. LEvy KAREN C, LIEBERMAN Mayer, Brown & Platt 190 S. La Salle Street Chicago, Illinois 60603 (312) 782-0600 Counsel for Petitioner WILSON - EPES PRINTING Co., INC - 789-0096 - WASHINGTON, D.C. 20001 QUESTION PRESENTED In Pennsylvania Vv. Delaware Valley Citizens’ Council, 107 S. Ct. 3078 (1987), this Court held that an attorneys’ fee multiplier reflecting the risk of loss in litigation is unavailable under federal fee-shifting statutes. Never- theless, the court of appeals authorized a risk multiplier in this class action brought under the Magnuson-Moss Act, holding that Delaware Valley and the express limi- tation on attorneys’ fees contained in the Act were irrele- vant because the parties reached a settlement that re- sulted in the creation of a monetary fund to compensate the plaintiff class. The question presented is as follows: Whether, in class actions filed under federal statutes that provide for.an award of attorneys’ fees, a “risk multiplier” is available, notwithstanding this Court’s de- cision in Delaware Valley and Congress’s express limita- tion on the amount of attorneys’ fees, whenever there is a settlement that produces a monetary fund for the plain- tiff class. li PARTIES TO THE PROCEEDING AND RULE 28.1 STATEMENT Respondent Arlie Glen Skelton is the named represen- tative of a plaintiff class consisting of: All original owners (other than solely for purposes of resale) of a General Motors 1976-1980 model year vehicle equipped with a THM 200 transmission pur- chased in the United States, its possessions and ter- ritories, or the District of Columbia, who incurred any transmission repair expense within the first 50,000 miles of use of that vehicle. Respondent law firms seeking attorneys’ fees. are: Sach- noff, Weaver & Rubenstein; Charles A. Boyle & Associ- ates; Corinblit & Seltzer; Abraham N. Goldman & Asso- ciates, Ltd.; Goodkind, Weschler, Labaton & Rudoff; Frances E. Goodman, P.C.; William J. Harte, Ltd.;: Law Offices of Beverly C. Moore, Ltd.; and Zwerling, Schacter & Zwerling. Petitioner General Motors Corporation’s subsidiaries (excluding wholly-owned subsidiaries) and affiliates are listed in App., infra, T7a-79a. OPINIONS BELOW TABLE OF CONTENTS ae gee aks sinwensaaccnsastensssinacnadsseveces STATUTORY PROVISION INVOLVED STATEMENT A. REASONS FOR GRANTING THE PETITION :. II. Il. Background 1. General attorneys’ fee principles 2. This litigation and the settlement agree- ment Respondents’ Claim For Attorneys’ Fees And The District Court’s Ruling . The Court Of Appeals’ Ruling And The District Court’s Decision On Remand THE COURT OF APPEALS HAS RESOLVED A RECURRING AND IMPORTANT ATTOR- NEYS’ FEE QUESTION IN A MANNER THAT CONFLICTS WITH PAST DECISIONS OF THIS COURT AND WITH STATUTORY STANDARDS PRESCRIBED BY CONGRESS.. THE COURT OF APPEALS’ HOLDING THAT RISK MULTIPLIERS ARE AVAIL- ABLE WHEN CLASS ACTION SETTLE- MENTS RESULT IN THE CREATION OF A MONETARY FUND IS PLAINLY IN ER- ROR AND SHOULD BE REVERSED REVIEW IS WARRANTED AT THIS TIME.. hated sisegnaneccneccntnonssvsiissnnsnnnnennseones (iii) 16 24 26 iv TABLE OF CONTENTS—Continued APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F TABLE OF AUTHORITIES Cases: Page Alyeska Pipeline Co. v. Wilderness Society, 421 Airs, Se NOE salah es Se hh 3 Blanchard v. Bergeron, 109 S. Ct. 939 (19G2).....:.. 10, 11, 19, | nd CUDAHY and COFFE, Ss cas ses ul . 0 g st G Mi 3 { ‘ ' =~ ~ nC eo oth : motive S ? nes of GM ai ts ( s. New Yo , Was Q } ( = date | (* ~ é { QXY 1 e =+ht ec er nes GM l Wan Feder Im- 2a provement Act, 15 U.S.C. $$ 2301-2312 (the “Magnuson- Moss Act”). The plaintiffs successfully petitioned the court for class certification and then settled with GM in 1985. Pursuant to the settlement, GM agreed to establish a $17 million fund to be distributed among the plaintiffs whose cars were affected by the substitution. As part of the settlement, the plaintiffs agreed that the fund would be the sole source of their attorneys’ fees and that the fees would be calculated on an hourly rather than on a percentage-of-the-fund basis. Class counsel submitted fee petitions based on the hours they expended multiplied by their hourly rate of pay- ment. Counsel also requested a 75% enhancement of their fee awards to compensate for the risks undertaken in commencing this litigation. In denying the enhance- ment, the district court reasoned that the determination of a fee award under common fund principles is not sig- nificantly different than under a statutory fee-shifting provision. Thus, the district court held that the fee-shift- ing provision of the Magnuson-Moss Act is relevant to the award of fees in this case and that, under that pro- vision, counsel are not entitled to an upward multiplier. The court alternatively concluded that, even if the Mag- nuson-Moss Act does not preclude the award of a multi- plier, plaintiffs’ counsel in this case are not entitled to a risk multiplier because the litigation never progressed be- yond class certification. I. The issue presented by this case is whether the prin- ciples governing the shifting of attorneys’ fees as be- tween a plaintiff and a defendant are equally applicable to the division of a common fund recovery between a plaintiff class and its attorneys. The district court rea- soned that the standards for determining reasonable attor- neys fees in common fund eases and statutory fee ce petite ial eal 3a eases should not be significantly different. In the court’s view, the use of statutory fee guidelines is especially relevant where the litigation is commenced and prosecuted under a federal statute which speci- fically provides for an award of attorneys’ fees. Skelton v. General Motors Corp., 661 F. Supp. 1368, 1375-76 (N.D. Ill. 1987) (footnote omitted). But there are a number of reasons, based on the development of the respective doctrines and on the logic of the two prob- lems, why these questions must be viewed separately. The factors which separate them are much more signifi- cant than those that link them. Traditionally in the United States, parties to a lawsuit bear their own expenses. Thus, each litigant must pay its own attorneys’ fees without regard to the outcome of the litigation. This has become known as the “Ameri- ean Rule.” By contrast, for centuries British statutory authority has allowed an award of fees and costs to the prevailing party. See Alyeska Pipeline Serv. Co. v. Wil- derness Soc’y, 421 U.S. 240, 247-64 (1975) (thoroughly discussing the history and present status of attorney fee awards). The American Rule continues to govern most of the cases in this country. However, there are many cases where the court may determine not only the amount of fees but which party shall pay them, based on statu- tory requirements or equitable doctrines. In some of these cases the court’s determination may take the place of, supersede or modify fee agreements between a party and its counsel. For example, Congress has created exceptions to the American Rule by inserting fee-shifting provisions in cer- tain statutes. See, e.g., 15 U.S.C. $§ 78i(e), 78r(a) (Se- curities Exchange Act of 1934); 15 U.S.C. § 1640‘a) (Truth in Lending Act); 15 U.S.C. § 2310(d) (2) (Mag- nuson-Moss Act); 42 U.S.C. § 7604(d) (Clean Air Act) ; 42 U.S.C. § 2000a-3(b) (Civil Rights Act of 1964, Title 4a II): 42 U.S.C. § 2000e-5(k) Civil Rights Act of 1964, Title VII): 42 U.S.C. §38612(c) (Fair Housing Act). Thus. a plaintiff that prevails in an action brought under 4 statute with a fee-shifting provision recovers the amount of its attorney's fee from the defendant. In contrast, when a case results in the creation of a common fund for the benefit of a plaintiff class, a court will exercise its equitable powers to award plaintiffs’ at- torneys’ fees out of the fund. Alyeska, 421 U.S. at 257- 58. In this type of case, the defendant deposits a speci- fied amount with the court for the benefit of the class in exchange for release of its liability. The attorneys’ fee award is then taken as a share of the fund, thereby diminishing the sum ultimately retained by the plaintiff class. Similar to the way a plaintiff's attorney may be compensated by a contingent fee, a plaintiff class pays its attorneys by sharing its recovery with them. Because there is a difference between statutory fee- shifting cases and common fund cases with respect, inter alia, to who bears the direct burden of compensating plaintiffs’ attorneys, different policies may govern the two types of cases. The common fund doctrine (also known as the “equitable fund” doctrine and the “fund- in-court” doctrine) is “based on the equitable notion that those who have benefited from litigation should share its costs.’ Report of the Third Circuit Task Force, Court Awarded Attorney Fees 14 (Oct. 8, 1989), reprinted in AppenJix of Appellants at 435, 453; see Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (“TA] litigant or lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole.”) ; Insurance Co. of N. America v. Norton, 716 F.2d 1112, 1115-16 (7th Cir. 1983). Statutory fee-shifting provi- sions, in contrast, reflect the intent of Congress “to en- courage private enforcement of the statutory substantive rights, be they economic or noneconomic, through the 5a judicial process.” Report of the Third Circuit Task Force, Court Awarded Attorney Fees 15 (Oct. 8, 1985), reprinted in Appendix of Appellants at 454. Defendants who have violated plaintiffs’ rights may be required to compensate plaintiffs for the costs incurred in enforcing those rights. Thus, in statutory fee-shifting cases, only parties (usually plaintiffs) may seek reimbursement whereas in common fund cases attorneys may seek com- pensation. Another difference between the two types of court- awarded fee arrangements concerns the role of the plain- tiffs’ attorneys. In common fund cases, once the attorneys secure a settlement for the class, they petition the court for compensation from the same fund. Thus, their “role changes from one of a fiduciary for the clients to that of a claimant against the fund created for the clients’ bene- fit.’ Id. at 20, reprinted in Appendix of Appellants at 459. The court becomes the fiduciary for the fund’s bene- ficiaries and must carefully monitor disbursement to the attorneys by scrutinizing the fee applications. See In re Fine Paper Antitrust Litigation, 751 F.2d 562, 583 (3d Cir. 1984) (fee requests from common fund are subject to “heightened judicial scrutiny”). Because statutory fee cases involve the plaintiff (not his attorney) as claimant and continue to be adversary proceedings, these concerns do not arise in the same way. The district court in this case reasoned, however, that “regardless of any theoretical distinctions between com- mon fund and statutory fee cases, the courts in this cir- cuit employ the same general standards to calculate at- torneys fees in both types of cases.” Skelton, 661 F. Supp. at 1376. To the extent that, in this circuit, both fee arrangements generally require the court to employ the lodestar approach, this observation is correct. See, e.g., Grekas v. Attorney Registration & Disciplinary Comm’n, 793 F.2d 846 (7th Cir. 1986) (statutory fee ease); In re Folding Carton Antitrust Litigation, 84 6a F.R.D. 245 (N.D. Ill. 1979). However, when a court must decide whether to compensate attorneys for the risks they incurred in undertaking the litigation, the difference between fee-shifting and common fund ar- rangements is quite significant. Panels of this court—as well as commentators and other courts—have expressed the concern that awarding risk multipliers to prevailing plaintiffs in statutory fee cases may inequitably burden defendants. For example, risk multipliers tend to penalize the parties with the strongest defenses. The stronger the defense, the higher the risk involved in bringing the suit and the greater the multiplier necessary to compensate plaintiff’s attor- ney for bringing the action. Thus, defendants with bet- ter cases pay higher plaintiff’s attorney fees. See Penn- sylvania v. Delaware Valley Citizens’ Council for Clean Air, 107 S. Ct. 3078, 3083, 3085 (1987); Kirchoff v. Flynn, 786 F.2d 320, 326 (7th Cir. 1986) (“One common concern with compensation for risk is that the multiplier should rise as the probability of success falls, soaking the unlucky defendant who had a good case (more than a 50% chance of prevailing) but lost anyway and there- fore faced a huge multiplier.”) ; Laffey v. Northwest Air- lines, Inc., 746 F.2d 4, 26 (D.C. Cir. 1984), cert. denied, 472 U.S. 1021 (1985); Leubsdorf, The Contingency Fac- tor in Attorney Fee Awards, 90 Yale L.J. 473, 488-89 (1981). This consideration does not directly apply in a common fund case. A risk multiplier will not penalize a defendant with a strong defense since the plaintiff class (not the defendant) is responsible for compensating its attorney by sharing its recovery. Further, assessing risk multipliers against losing defendants in effect requires these defendants to “sub- sidize” plaintiffs’ lawyers for their unsuccessful lawsuits against other defendants. In statutory fee cases, this is “manifestly inconsistent with Congress’ intent to award attorney’s fees oniy to prevailing parties.” Delaware Ta Valley, 107 S. Ct. at 3083; McKinnon v. City of Berwyn, 750 F.2d 1383, 13892 (7th Cir. 1984) (“The fundamental problem of a risk bonus is that it compensates attorneys, indirectly but effectively, for bringing unsuccessful civil rights suits, even though the attorney’s fee statute is expressly limited to cases where the party seeking the fee prevails.”) ; Laffey, 746 F.2d at 34 n.138; Leubsdorf, supra, at 490. In a common fund case, however, this re- sult cannot directly occur because the specific amount of the fee is charged against the plaintiffs, not the defend- ant; the defendant’s liability is limited to the amount of the common fund, which is available to provide attorneys’ fees.! Therefore, the arguments—equitable and statutory— against risk multipliers in statutory fee cases have much less application in common fund cases.* This may be the reason that courts awarding fees in common fund cases generally do not express the same reluctance to compen- sate attorneys for the risk of nonpayment. Although the Supreme Court has recently rejected the position that risk multipliers are prohibited in statutory fee cases, it has set forth stringent requirements for awarding them. Delaware Valley, 107 S. Ct. at 3090-91 1GM argues that the settlement agreement’s reverter clause (“Any portion of the settlement fund or accrued interest remaining after the distributions ... shall revert to General Motors.” Settle- ment Agreement { 25) distinguishes this case from the typical com- mon fund case. We disagree. In all common fund cases, the de- fendant has at least “fa colorable claim” to any unclaimed monies. See Boeing v. Van Gemert, 444 U.S. 472, 481 & n.7 (1980). The significant feature that distinguishes common fund cases from statutory fee cases is that, in the former, defendants’ potential lia- bility has been limited. 2 This circuit has also mentioned that risk multipliers provide “an incentive to pursue unmeritorious litigation.” Hagge v. Bauer, 827 F.2d 101, 111 (7th Cir. 1987); see also McKinnon v. City of Berwyn, 750 F.2d 1383, 1892 (7th Cir. 1984). 8a (O’Connor, J., concurring in part and concurring in the judgment) ;* see infra. In a common fund case, where there is no direct or immediate danger of unduly burden- ing the defendant, a court has more latitude in exercis- ing its equitable powers to determine whether the plain- tiff class should compensate its attorneys for their risk of nonpayment. And it remains arguable that, at least in the common fund context, attorneys whose compensation depends on their winning the case, must make up in com- pensation in the cases they win for the lack of compen- sation in the cases they lose. Thus, when a case is initiated under a statute with a fee-shifting provision and is settled with the creation of a common fund, the question may arise whether statutory fee principles should govern in whole or in part the at- torney fee award. The district court in this case con- cluded that the fee-shifting provision of the Magnuson- Moss Act should have a significant impact on the deter- mination of the fees awarded in this common fund case. Skelton, 661 F. Supp. at 1389. In the same vein, GM ar- gues that because the plaintiffs sought relief under the 3 Justice O’Connor agreed with part of the reasoning of the four- vote plurality and with some of the arguments offered by the four- vote dissent. Her position on risk multipliers thus represents the position of a majority of the Court. Justice O’Connor agreed with the plurality that “no enhancement for risk is appropriate unless the applicant can establish that without an adjustment for risk the prevailing party ‘would have faced substantial difficulties in find- ing counsel in the local or other relevant market.’” Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 107 S. Ct. 3078, 3091 (1987) (O’Connor, J., concurring in part and concurring in the judgment) (quoting the plurality opinion, 107 S. Ct. at 3089). Justice O’Connor also observed that “ ‘legal’ risks or risks peculiar to the case” are not sufficient to warrant an enhancement of the lodestar. Jd. (citing Blum v. Stenson, 465 U.S. 886, 898 (1984)). Thus, Justice O’Connor agreed with the dissent that ‘‘compensa- tion for contingency must be based on the difference of contingent fee cases as a class, rather than on an assessment of the ‘riskiness’ of any particular case.” Id. at 3089. 9a Magnuson-Moss Act, its fee-shifting provision should con- trol the award of their attorneys’ fees. These conclusions are incorrect and insupportable. Neither the Magnuson- Moss Act itself nor cases involving common funds and other fee-shifting statutes lead us to conclude that the fee-shifting provision of the Magnuson-Moss Act should affect the fee determination in this case, which was set- tled, resulting in a common fund.* When a ease results in a common fund, courts gen- erally follow the “equitable fund doctrine” in determin- ing the attorney fee award. See Van Gemert, 444 U.S. at 478 (“The common fund doctrine reflects the tradi- tional practice in courts of equity.”); F. MacKinnon, Contingent Fees for Legal Services 148 (1964) (“pay- ment of fees by the court from a common fund is stand- ard practice in all jurisdictions’). In current practice, the court exercises its equitable powers by first caleulat- ing the lodestar, taking into consideration number of hours and how they were spent and the “value of each attorney’s services to the class.” In re Fine Paper, 751 F.2d at 583. Next, the court may adjust the lodestar to reflect the “contingent nature of the attorney’s under- 4 The Third Circuit Task Force concluded that: The traditional common-fund case and those statutory fee cases that are likely to result in a settlement from which adequate counsel fees can be paid, should be treated differently than the more typical statutory fee case involving the declaration or enforcement of rights or relatively modest sums of money. Report of the Third Circuit Task Force, Court Awarded Attorney Fees 21 (Oct. 8, 1985), reprinted in Appendix of Appellants at 435, 460 (emphasis added). The Task Force ultimately recommended that whenever a settlement fund is created, attorneys’ fees should be awarded on a percentage, rather than on an hourly basis. /d. Although there are certainly grounds for believing that a percent- age fee arrangement would be more efficient than the current ap- proach (of calculating a lodestar and then determining an enhancer, where appropriate), we will not overturn what seems to have be- come the accepted method of determining fees in this circuit. 10a taking.” * Id. This requires the court to assess the “‘like- lihood of success in obtaining a judgment or settlement,” as measured at the time the attorney began work on the case. Id. Thus, where appropriate, equitable fund prin- ciples allow for an upward adjustment of the lodestar. Even in cases initiated under statrtes containing fee- shifting provisions, other circuits have applied common fund principles to determine attorneys’ fees when resolu- tion of disputes results in the creation of common funds. See, e.g., In re Fine Paper, 751 F.2d 502; City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974). The Sec- ond Circuit, in an antitrust class action that resulted in a $10 million settlement explained that it must use com- mon fund principles to determine attorneys’ fees because the Clayton Act, which provides for the award of at- torneys’ fees in civil antitrust suits generally, does not authorize award of attorneys’ fees to a plaintiff who does not recover a judgment or who settles his claim with the defendant. . . . The only basis for awarding an attorney’s fees in such cases is the equitable fund theory doctrine... Id. at 468-69 (citations omitted). Recognizing that this doctrine is a part of the federal court’s equity jurisdic- 5 The Third Circuit also allows an upward adjustment of the lodestar to compensate attorneys for the delay in payment, when litigation extends over several years, and for the quality of the representation. In re Fine Paper Antitrust Litigation, 751 F.2d 562, 583-84 (3d Cir. 1984). Whether the lodestar should be ad- justed to account for any of these factors is not at issue in this case. In any event, a multiplier may not be the best method for compensating attorneys for the superior quality of their work. This should be reflected in the lodestar in the form of a high hourly rate. Delay in payment may be compensated in either of two ways: (1) by using the attorneys’ current rates (as the district court did here); or (2) by using historical rates plus a prime rate en- hancement. The courts in this circuit generally use current rates. See Skelton v. General Motors Corp., 661 F. Supp. 1368, 1382 & n.18 (N.D. Ill. 1987). lla tion, the Second Circuit described its underlying rationale - as follows: Under this theory claims may be filed not only by a party to the litigation, but also by an attorney whose actions conferred a benefit upon a given group or class of litigants. The underlying principle here is that the members of the group should pay ‘“com- pensation as was reasonable” above and beyond re- imbursement for out-of-pocket expense to the attorney representing their interests. Id. at 469. The Third Circuit more recently explained its position in a similar case. In re Fine Paper involved a class ac- tion brought under the Clayton Act, 15 U.S.C. §§ 15, 26, to enforce the Sherman Act, 15 U.S.C. $1. The lawsuit was settled and the defendant created a fund “in exchange for [its] release... from liability both for damages and for statutorily authorized fees.” 751 F.2d at 582. The Third Circuit noted that in settling class actions brought under statutes containing fee-shifting provisions, there are two approaches for awarding plaintiffs’ attorneys’ fees. A court might take the position that damages to the class must be settled separately. Once a fund is created to compensate the plaintiff class for its damages, the court can “either entertain litigation or consider a sepa- rate settlement of the defendant!’s] liability for statu- tory fees.” Jd. at 582. Alternatively, the court may allow a single settlement that releases the defendant from both damage and statutory fee liability. The district court in the present case opted for the latter approach. Although this approach creates a potential conflict of interest be- tween class counsel and class members, who are now com- peting for the same money, it has the possible advantage of facilitating the settlement of class actions. Jd. at 582- 83. The Third Cireuit described this second approach as the “conversion” of a statutory fee case into a common 12a fund case. Id. at 583. Regardless whether we choose to adopt the “conversion” characterization, it is clear that, when a settlement fund is created in exchange for release of the defendant’s liability both for damages and for statutory attorneys’ fees, equitable fund principles must govern the court’s award of the attorneys’ fees. See id. at 582-84; Lindy Bros. Builders, Inc. v. American Radi- ator & Standard Sanitary Corp., 487 F.2d 161, 164-65 (3d Cir. 1975). Moreover, looking specifically at the Magnuson-Moss Act, the fee-shifting provision, by its terms, does not pur- port to apply to a fee determination in a case settled in a4 common fund. The provision provides for the award of attorney’s fees as part of the judgment if the consumer “finally prevails” in an action brought under the statute.° 15 U.S.C. § 2310(d) (2). Nor is there any evidence in the legislative history of Congress’ intent to apply the fee- shifting provision to common fund or settlement cases of any kind.‘ 6 Section 2310(d)(2) provides: If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys’ fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in con- nection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such award of attorneys’ fees would be inappropriate. 15 U.S.C. § 2310(d) (2). 7 With respect to the fee-shifting provision of the Magnuson- Moss Act, Congress made only the following remarks: Subsection (c) of section 110 provides for the recovery of court costs and reasonable attorney’s fees in the event a “nurchaser,” as defined in Title I, is successful in a suit for breach of an express or implied warranty or service contract obligation. This provision would make it economically feasible for con- sumers to pursue their remedies in state courts. It should be noted that an attorney’s fee is to be based upon actual 13a Even in cases in which the Magnuson-Moss Act is ap- plicable to the fee award (as it would have been had the plaintiff class won a judgment against GM), the fee- shifting provision does not prevent the court from award- ing risk multipliers.» The district court recognized that this circuit has in recent years disfavored awarding fee enhancers in statutory fee cases." As we noted above, however, the Supreme Court has since squarely addressed this issue. In Delaware Valley, a group of citizens had prevailed in an action under the Clean Air Act, 42 U.S.C. § 7410. Fees were awarded to the plaintiffs (not directly to their attorneys) under the fee-shifting provision of the Act, id. § 7604(d). The defendant appealed the district court’s enhancement of the fee award to compensate the time expended rather than being tied to any percentage of the recovery. This requirement is designed to make it eco- nomically feasible to pursue consumer rights involving inex- pensive consumer products. Of course where small claims courts are available, the Committee encourages their use; and to the extent legal representation is not necessary in such courts, attorney’s fees would probably not be available. S. Rep. No. 986, 92d Cong., 1st Sess. 21, 117 Cong. Rec. 39614 (1971). 8 As noted above, see supra p. 4, statutory fee-shifting provides an award to the plaintiff. Arguably at least, the arrangements of the plaintiff with its attorneys may differ. 9To the extent that this circuit has previously taken a position disfavoring risk multipliers in fee-shifting cases, sce, e.g., MeKin- non, 750 F.2d at 1392, we appear to be withdrawing from that position. See Kirchoff v. Flynn, 786 F.2d 320, 326 (7th Cir. 1986) (“Increasing hourly rates for risk and delay is one way of restor- ing the hourly rate a lawyer could obtain from a paying client, and a necessary way when the base of the fees must be the hourly rate.”): Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc., 776 F.2d 646, 661 (7th Cir. 1985) (‘We do not mean to imply that a multiplier for the contingent nature of success is inappropriate when lawyers bear the risk of nonpayment and the delay in payment.”). But see Hagge, 827 F.2d at 111 (risk of loss is not a basis in this circuit for enhancing lodestar; Supreme Court has yet to decide this issue). 14a plaintiffs’ attorneys for assuming the risk of loss through nonpayment. Justice O'Connor, casting the deciding vote, agreed with the plurality that the circumstances of Dela- ware Valley did not warrant the award of a risk multi- plier. She agreed with the dissent, however, “that Con- gress did not intend to foreclose consideration of contin- gency in setting a reasonable fee under fee-shifting pro- visions.” 107 S. Ct. at 3089 (O’Connor, J., concurring in part and concurring in judgment). In light of the Delaware Valley decision, we cannot adopt the position that risk multipliers are prohibited in all statutory fee-shifting cases. GM contends, however, that the express language of the fee-shifting provision of the Magnuson-Moss Act prevents courts from awarding fee enhancers. This provision provides that attorneys’ fees should be “based on actual time expended.” 15 U.S.C. § 2310(1d) (2). See supra note 6. In our view, these arts do not preclude a risk multiplier. Instead, they indicate Congress’ intent that attorneys’ fees be computed on an hourly basis “rather than being tied to any percentage of the recovery.” S. Rep. No. 986, 92d Cong., Ist Sess. 21, 117 Cong. Rec. 39614 (1971). See supra note 7. Be- cause a risk enhancer is applicable to the lodestar—it multiplies the lodestar by a number representing the probability of loss—it is based on the number of hours the attorneys worked and not the size of plaintiffs’ recov- ery. Thus a risk multiplier is “based on actual time expended.” Il. Having concluded that plaintiffs’ counsel are not pre- cluded from seeking a fee enhancer to compensate for contingency we turn to the question whether under the circumstances of this case they are entitled to the risk multiplier they seek. The district court held that a risk multiplier is unnecessary to fully compensate the attorneys because “the action never proceeded very far beyond the initial pleading stages.” Skelton, 661 F. Supp. at 1392. 15a The district court’s determination of reasonable attorney fees, including its decision whether to award a risk mul- tiplier, generally is reviewed only for abuse of discretion. See In re Illinois Congressional Districts Reapportion- ment Cases, 704 F.2d 380, 382 (7th Cir. 1983) ; Swanson American Consumer Indus.., Ine.., 517 F.2d 555, 562 7th Cir. 1975) (“That abuse of discretion is the general standard for review of trial court awards of attorneys’ fees under the ‘fund’ theory ... is well established.”’). We will, however, overturn a fee award that is based on an error of law. Lynch v. City of Milwaukee, 747 F.2d 423, 426 (1984); see also Spanish Action Comm. of Chi- cago v. City of Chicago, 811 F.2d 1129, 1134 (7th Cir. 1987). Here the district court erred in basing its denial of a risk multiplier on the fact that the parties settled at a relatively early stage in the litigation. The point at which plaintiffs settle with defendants (or win a judgment against defendants) is simply not relevant to determin- ing the risks incurred by their counsel in agreeing to represent them. Sce In re Fine Paper, 751 F.2d at 583 (risk should be “measured at the point when the attor- ney’s time was committed to the case”). In the present case (as in all similar cases), the early settlement is reflected in the lodestar-plaintiffs’ counsel worked fewer hours than they would have if the case had gone to trial. Because we conciude that early settlement is an insuf- ficient basis for denying a risk multiplier, we remand this case to the district court to consider whether class counsel are entitled to compensation for incurring the risk of nonpayment. We fully realize the difficulty of this undertaking. The district court must balance the competing goals of fairly compensating attorneys for their services rendered on behalf of the class and of protecting the interests of the class members in the fund. See Comment, Adjusting At- 16a torney Fee Awards Through Multipliers in Antitrust Class Actions, 21 Hous. L. Rev. 801, 812 (1984). Never- theless, when attorneys’ receipt of payment is contingent on the success of the litigation, reasonable compensation may demand more than the hourly rate multiplied by the hours worked, for that is exactly what the attorneys would have earned from clients who agreed to pay for services regardless of success. Thus, to account for the contingent nature of the compensation, a court should assess the riskiness of litigation. This task is not without its prob- lems. First, it entails a retroactive calculation of the prob- ability of success as measured at the beginning of litiga- tion. Second, it places plaintiffs’ lawyers in the unseemly position of convincing the court that their clients’ case was weak. For these reasons (and others) it has been suggested that a standard risk multiplier be used in all contingent fee arrangements. Sce Leubsdorf, supra p. 6, at 511 ‘suggesting that “lawyers in successful cases re- ceive a fee twice what they would have received from clients whose payment is not contingent on success”). Despite the problems related to subjectiveness inherent in the determinaion of a risk muliplier, the district court, familiar as it is with the nature of the litigation, should retain discretion to decide if and to what extent the plain- tiffs’ counsel should be compensated for risk. It may be that a doubling of the lodestar would provide a sensible ceiling. It would certainly address the concern that ex- tremely risky cases (those bordering on the frivolous) not warrant extremely large risk multipliers. Since class counsel here have requested an amount less than double their lodestar we need net decide this definitively. Thus, we instruct the district court to examine plaintiffs’ attor- neys’ reasons for asserting that this class action was a risky undertaking and to determine whether these reasons justify the 75% multiplier’ they seek (or’some multiplier less than that). ' 17a lil. One of the plaintiff’s attorneys, Beverly C. Moore, Jr., appeals the district court’s determination of his lodestar award of $396,813.32. GM argues that the settlement agreement, which the court approved in a separate order on the same day that it awarded Moore’s lodestar, pre- cludes Moore from seeking appellate review of the court’s determination of his lodestar. We agree with GM. The settlement agreement creates a $17 million fund, from which compensation for plaintiffs’ attorneys must be taken. The agreement contains a section that describes in detail how costs and expenses, including attorney fees, were to have been recovered. This section requires plain- tiffs’ attorneys to file with the district court a petition for fees and costs incurred in the litigation based on com- pensation for actual hours spent (the “lodestar”) and re- imbursement for actual costs and expenses. This section further states that “[bloth parties agreé not to seek ap- pellate review of any determination of the lodestar figure or actual costs and expense.” Settlement Agreement { 34, Appendix of Appellants at 102. In direct contradiction of the Settlement Agreement, Moore makes such an appeal. He contends that because he is not a party to the Settlement Agreement, he is not bound by its terms. His claim is two-fold: first, he never signed the agreement; second, the attorneys are not the “narties” to the agreement. We do not accept either argu- ment. Although Moore was not a signatory to it, his conduct binds him to the agreement. See Soelzer v. Soelzer, 382 Ill. 393, 399, 47 N.E.2d 458, 460 (1943) (acts and con- duct of adopting parent validated unsigned adoption con- tract); Amelco Elec. Co. v. Arcole Midwest Corp., 40 Il. App. 3d 118, 125-26, 351 N.E.2d 349, 354 (1976) (sub- contractor who did not sign contract was bound because 18a he did not object to its terms and acted on it).1° Pursuant . to the settlement agreement, Moore, along with the other -——attorneys, petitioned the district court for their fees and expenses. Moore joined the other attorneys in participat- ing in the October 30, 1986 fairness hearing on the settle- ment agreement and in the November 10, 1986 hearing on attorneys’ fees, which was a continuation of the fairness hearing. Thus, although Moore never signed the agree- ment, he followed its procedures. Moreover, Moore never filed an objection to the settlement agreement. And, most important, he tried his case and accepted his award. A party may become bound to a contract by accepting its benefits, even though he did not sign it. Bi-County Prop- erties v. Wampler, 61 Ill. App. 3d 799, 805, 378 N.E.2d 311 (1978) (“Conduet, including an acceptance of benefits under a contract, may be sufficient to constitute a ratifica- tion binding on the party accepting the benefits as if he had signed the contract.”). Clearly, the settlement agree- ment is a contract. See Airline Stewards & Stewardesses Assoc., Local 550 v. Trans World Airlines, Inc., 713 F.2d 319, 321 (7th Cir. 1583) (a settlement agreement is a “contract and as such the construction and enforcement of settlement agreements are governed by pfinciples of local law applicable to contracts generally”). Moore ac- cepted the benefits of the contract when he cashed his check. He cannot obtain the quid of the settlement agree- ment and avoids the quo of foregoing his right to appeal. We also reject Moore’s contention that because the at- torneys are not “parties” to the Settlement Agreement, the promise not to seek appellate review does not apply to them. Although the Settlement Agreement defines par- ties as “plaintiffs and defendant General Motors,” Settle- ment Agreement {11, Appendix of Appellants at 77, the section governing costs and fees clearly binds the at- torneys. Drafted in a less-than-perfect manner, that sec- The Settlement Agreement provides that Illinois law should govern its construction. Corinblit & Seltzer; Abraham N. Goldman & Associates, Ltd.; ’ Goodkind, Weschler, Labaton & Rudoff; Francis E. Goodman, P.C.; William J. Harte, Ltd.; Law Offices of Beverly C. Moore, Jr.; Sachnoff, Weaver & Rubenstein, Ltd.; and Zwerling, Schacter and Zwerling. 23a Procedural History This litigation originated in the In re’General Motors Engine Interchange Litigation, MDL No. 308 (N.D. Ill.), rev'd, 594 F.2d 1106 (7th Cir.), cert. denied, 444 U.S. 870, 100 S.Ct. 146 (1979), aff'd after remand, 620 F.2d 1190 (7th Cir. 1980) (the “Hngines” case). In Engines, the plaintiffs alleged that GM violated the written war- ranty provisions of the Magnusor-Moss Warranty Act, 15 U.S.C. §§ 2301-2312, by substituting different engines and other automotive parts, including transmissions, into certain lines of GM automobiles. Specifically, the En- gines plaintiffs complained that GM had installed Chev- rolet engines in 1977 Oldsmobiles, and THM 200 trans- missions in- automobiles which were supposed to be equipped with a THM 350 transmission. See Engines, 594 F.2d at 1114, 1132, n.44. On remand, Judge Mc- Garr, who presided over the Engines litigation, separated the transmissions claims, and ruled that the case would proceed only on the engine interchange issues. In response to Judge McGarv’s decision, plaintiffs filed the Skelton action on March 29, 1979. An amended com- plaint was filed two months later. Although the Skelton complaint was patterned after the written warranty claims in the Engines litigation, it also contained allega- tions of deceptive warranties and breach of implied war- ranties. The Newton claims were filed approximately one year after Skelton, and alleged a different theory of lia- bility stemming from GM’s substitution of the THM 200 transmission. These plaintiffs alleged that GM’s conduct in replacing the THM 350 transmission with a THM 200 transmission violated the implied warranty provisions contained in UCC § 2-314(2) (ce) because the substituted transmissions were not “fit for their ordinary purpose.” During approximately the same time frame, two other groups of plaintiffs instituted similar litigation in New York. The Attard action was filed in New York state 24a court in 1979, and the Morgan action was filed in the New York federal district court in 1981. These com- plaints alleged that GM’s conduct constituted a breach of its implied and express warranties in violation of the UCC and the Magnuson-Moss Warranty Act. In 1979, GM moved to dismiss the Skelton complaint, which was then pending before Judge John Powers Crow- ley. The case was transferred to Judge Moran, and the parties rebriefed the pending motion to dismiss. On Oc- tober 1, 1980, Judge Moran issued an opinion which up- held plaintiffs’ written warranty claim, and dismissed the implied warranty and defective warranty claims. Skelton v. General Motors Corp., 500 F. Supp. 1181, 1190-95 (N.D. Ill. 1980). GM filed an interlocutory ap- peal, which was accepted by the Seventh Circuit. While Skelton was on appeal to the Seventh Circuit, the Skel- ton plaintiffs amended their complaint to include the Newton merchantability claims, and GM filed a motion to dismiss all the remaining Skelton and Newton claims. In September of 1981, the Seventh Circuit issued its opinion in Skelton, reversing Judge Moran’s recognition of a written warranty claim based on GM’s substitution of the THM 200 transmissions for THM 350 transmis- sions. Skelton v. General Motors Corp., 660 F.2d 311 (7th Cir. 1981). The Seventh Circuit denied plaintiffs’ request for a rehearing and rehearing en bane on Decem- ber 11, 1981; and the Supreme Court subsequently de- nied plaintiffs’ petition for certiorari. Skelton v. General Motors Corp., 456 U.S. 974, 102 S.Ct. 2238 (1982). The Skelton and Newton plaintiffs filed a consolidated complaint under Magnuson-Moss shortly after the Sey- enth Circuit issued its opinion. The cases were then transferred to Judge Getzendanner, who accepted sup- plemental briefs and heard oral argument on the motion to dismiss. The cases were transferred to this court a few months later. At the time of this transfer, the par- 25a ties were still involved in the process of investigating and briefing issues regarding their class certification motions. This process included hiring experts, taking some depo- sitions and responding to numerous inquiries regarding the class action.* In addition, due to the continuous de- velopment of the law in this area, the parties were often required to supplemert their certification briefs to ad- dress the most recent decisions regarding class certifica- tion in cases of this subject and magnitude. During this same time period, significant developments were taking place in New York and Washington, D.C. In New York, the Attard court denied GM’s motion to dismiss, and was affirmed by the New York appellate court. Counsel proceeded with class certification motions and discovery in both Attard and Morgan; and then agreed to informally stay these proceedings pending the outcome of the Skelton Newton class certification mo- tions before this court. In Washington, GM was involved in an administrative action conducted by the Federal Trade Commission (“FTC”). The parties engaged in ex- tensive discovery during the course of the FTC investi- gation, and subsequently entered into a consent decree settling the administrative action in November of 1983. This settlement, which was opposed by the Skelton /New- ton plaintiffs, provided for the establishment of a Media- tion and Arbitration program to resolve consumer com- plaints stemming from the operation of GM automobiles.‘ 3 The Magnuson-Moss Warranty Act, which provided federal jurisdiction, contains a one-hundred plaintiff rule for class actions instituted pursuant to its provisions. 15 U.S.C. § 2310(d)(3)(C). This unique requirement necessitated considerable expenditures of time both before and after this court’s order certifying the “fail- ures” class. 4This Mediation and Arbitration Board, which operates in con- junction with the Better Business Bureau, has awarded over $30 million to aggrieved consumers since its inception in 1983. 26a In 1984, the Ske/ton/Newton plaintiffs suggested that the court proceed with an initial certification of a “fail- ures” class. This court issued an interim order on De- cember 20, 1984, which revealed the court’s intent to certify a “failures” class under Count I of the complaint. The court declined to certify any other classes at that time. The court also held that state privity law was ap- plicable to the Magnuson-Moss cause of action. Skelton v. General Motors Corp., No. 79 C 1243, Slip op. at 3 (N.D. Ill. Dee. 20, 1984). In addition, it denied GM’s motion to dismiss plaintiffs’ label and latent defect claims (Counts III and IV of the consolidated complaint). Jd. The parties began discussing the possibility of settle- ment following the issuance of this interim order. These discussions extended throughout 1985, and included con- ferences both in and out of court. After extensive nego- tiations, the parties reached a general agreement in De- cember of 1985. They expended considerable time nego- tiating and drafting the final provisions of this agree- ment, which were presented to the court on June 16, 1986. The Agreement encompasses the following class of plaintiffs: All original owners (other than solely for purposes of resale) of a General Motors 1976-1980 model year vehicle equipped with a THM 200 transmission pur- chased in the United States, its possessions and ter- ritories, or the District of Columbia, who incurred any transmission repair expense within the first 50,000 miles of use of that vehicle. In this settlement, GM agreed to establish a $17 mil- lion fund which will provide reimbursement for trans- mission service and repair costs incurred by plaintiffs in the “failures” class." The parties agreed that the fund 5 The settlement agreement also provides for an additional $2.5 million to be deposited by GM in the event that the plaintiffs’ claims deplete the $17 million already deposited. 27a would be the only source of any attorneys’ fees sought by plaintiffs’ counsel, and that plaintiffs’ counsel would not seek a fee award calculated on a percentage-of-recovery basis. In accordance with this agreement, plaintiffs’ coun- sel have submitted timesheets and expense reports which reflect the hours of work devoted to this litigation. Motion For Attorneys’ Fees Initially, the court must determine the source of its authority to award attorneys’ fees in this action. The class counsel argues that fees should be awarded under the “common fund” doctrine, which permits an award of attorneys’ fees where a litigant or his attorney recovers a common fund for the benefit of persons other than him- self or his client. See generally Boeing v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745 (1980): Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616 (1970). In contrast, GM argues that these fee petitions should be _Scrutinized under the attorneys’ fee provision set forth in the Magnuson-Moss Warranty Act * and the Supreme Court and Seventh Circuit caselaw pertaining to statutory fee awards. See generally Pennsylvania v. Delaware Val- ley Citizens’ Council, 106 S.Ct. 3088 (1986): Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541 (1984): Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933 (1983) ; Ohio- Sealy Mattress Manufacturing Co. v. Sealy, Inc., 776 F.2d 646 (7th Cir. 1985). ® This section provides: If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys’ fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in con- nection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys’ fees would be inappropriate. 15 U.S.C. 2310(d) (2). 28a In the court’s view, the plaintiffs have exaggerated the difference between calculating fees pursuant to the com- mon fund doctrine as opposed to a statutory fee provi- sion. An award of fees under the common fund doctrine is an equitable practice which “rests on the perception that persons who obtain the benefit of a lawsuit without contributing to its cost are unjustly enriched at the suc- cessful litigant’s expense.” Boeing, 444 U.S. at 478, 100 S.Ct. at 749. The doctrine enables the court to offset this inequity “by assessing fees against the entire fund, thus spreading fees proportionately among those benefitted from the suit.” Jd. In addition to this unjust enrich- ment rationale, the common fund doctrine also contains an “incentive” rationale: by permitting an award of fees in these cases, the doctrine operates to encourage at- torneys to engage in litigation which benefits certain groups of people who could not otherwise obtain repre- sentation for their interests., Jn re Folding Carton Anti- trust Litigation, 84 F.R.D. 245, 255, 262 (N.D. Ill. 1979) ; Arenson v. Board of Trade, 372 F. Supp. 1349, 1356 (N.D. Ill. 1974); Oppenlander v. Standard Oil Co., 64 F.R.D. 597, 614 (D. Colo. 1974). See Leubsdorf, The Contingency Factor in Attorney Fee Awards, 90 Yale L.J. 473, 476 (1981).* Although statutory fee awards are not based on an unjust enrichment principle, they contain the same “incentive” rationale as the common fund doctrine. Pennsylvania v. Delaware Valley Citizens Council, 106 S.Ct. at 2098 (1986) (“the aim of [fee- shifting] statutes [is] to enable private parties to obtain lecal help in seeking redress for injuries resulting from the actual or threatened violation of specific federal laws.”’). See Leubsdorf, supra, at 477. 7 See generally Dawson, Lawyers and Involuntary Clients in Public Interest Litigation, 88 Harv.L.Rev. 849 (1975); Dawson, Attorneys and Involuntary Clients: Attorney Fees From Funds, 87 Harv.L.Rev. 1597 (1974). 29a Given this commonality of purpose, this court finds that the standards for determining reasonable attorneys’ fees in common fund eases and statutory fee cases should not be significantly different.* In the court’s view, the use of statutory fee guidelines to determine a proper fee award is especially relevant where the litigation is com- menced and prosecuted under a federal statute which specifically provides for an award of attorneys’ fees. When parties settle a case involving statutory fees, the amount ultimately awarded should not be dependent upon whether the fees are assessed directly against the de- fendant, or against a fund created by the defendant. See Leubsdorf, supra, at 489. Thus, although there may be theoretical distinctions between the common fund doc- trine and statutory fees, these distinctions are not so great that they justify the use of completely different standards when calculating an award of attorneys’ fees in a particular case.” 8 See Federal Judicial Center, Attorneys’ Fees in Class Actions 4-11 (1980) (discussing the considerations for awarding attorneys’ fees without mentioning a distinction between fund cases and statutory fee cases). ®If anything, the distinction between common fund fee awards and statutory fee awards may justify heightened judicial scrutiny because the fee will be paid out of a fund in which the defendant has only a contingent interest, and the plaintiffs’ attorneys’ interests conflict with the interests of the fund’s beneficiaries. A recent dis- cussion ef the distinctions between common fund and statutory fee awards has suggested that the nature of a common fund award may actually necessitate greater judicial scrutiny of the fee peti- tions. Third Circuit Task Force, Court Awarded Attorney Fees, 15 (October 8, 1985). See also Citu of Detroit v. Grinnell, 495 F.2d 448, 469 (2d Cir. 1974), where the court noted: Courts must always heed the admonition of the Supreme Court in Trustees v. Greenough [105 U.S. 527, 536 (1881)] when it advised that fee awards under the equitable fund doctrine were proper ‘if made with moderation and a jealous regard to the rights of those interested in the fund.’ The Third Circuit Task Force recommends a specific procedure in common fund and statutory fee cases; however, this procedure— 30a Furthermore, regardless of any theoretical distinctions between common fund and statutory fee cases, the courts in this circuit employ the same general standards to cal- culate attorneys’ fees in both types of cases. In Waters v. Wisconsin Steel Works of International Harvester Co., 502 F.2d 1309 (7th Cir. 1974), cert. denied, 425 USS. 997, 96 S.Ct. 2214 (1976), a Title VII case, the court adopted the guidelines for attorneys’ fees set forth in Rule 2-106 of the Code of Professional Responsibility: 1) The time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal services properly; 2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; 3) Fees customarily charged in the locality for sim- ilar legal services; 4) The amount involved and the results obtained; 5) Time limit imposed by the client or the circum- stances; 6) The nature and length of the professional rela- tionship with the client; 7) The experience, reputation and ability of the lawyer or lawyers performing the services; and 8) Whether the fee is fixed or contingent.’ which involves a percentage fee arrangement—is impossible in this case because the plaintiffs have agreed not to seek fees based on such a calculation. 10 These factors were routinely used in common fund cases long before the advent of statutory fee provisions. Sve In re Folding Carton Antitrust Litigation, 84 F.R.D. 245, 255-56 (N.D. Ill. 1979) (tracing articulation of these standards to In re Osofsky, 50 F.2d 925, 927 (S.D. N.Y. 1931)). More recently, the Seventh Circuit has indicated that use of the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 3la The courts in this circuit have reiterated these factors in both common fund and statutory fee cases. See, a., Spray-Rite Service Corp. v. Monsanto Co., 684 F.2d 1226, 1249 (7th Cir. 1982) (antitrust); Loctite Corp. v. Fel- Pro, Inc., 667 F.2d 577, 585 (7th Cir. 1981) (patent) ; Mills v. Eltva, 663 F.2d 760, 762 (7th Cir. 1981) (com- mon fund); Muscare v. Quinn, 614 F.2d 577, 579 (7th Cir. 1980) (42 U.S.C. $ 1988); Gross »v. Schweiker, 503 F.Supp. 260, 262 (N.D. Ind. 1983) (EAJA-28 U.S.C. $2412); Kennedy v. Nicastro, 546 F.Supp. 267, 270 (N.D. Ill. 1982) (shareholders’ derivative action) ; Zilker v. Klein, 540 F.Supp. 1196, 1199 n.8 (N.D. Ill. 1982) (shareholders’ derivative action) ; United States v. Vague, 521 F.Supp. 147, 152 (N.D. Ill. 1981) (criminal); Will v. United States, 90 F.R.D. 336, 338 (N.D. Ill. 1981) (common fund); In re Folding Carton Antitrust Litiga- tion, 84 F.R.D. 245, 255-56 (N.D. Ill. 1979) (common fund); Arenson v. Board of Trade, 372 F.Supp. 1349, 1351 (N.D. Ill. 1974) (common fund). See also In re Warner Communications Securities Litigation, 6:8 F. Supp. 735, 746-47 (S.D.N.Y. 1985); Phemister v. Harcourt-Brace Jovanovich, Inc., 1984-2 Trade Cases { 66,234 at 66,995 (N.D. Ill. 1984); In re Cenco Ine. Securities Litigation, 519 F.Supp. 322, 325-26 (N.D. Il. 1981); fn ve Clark Oil Antitrust Litigation, 422 F.Supp. 503, 511 (E.D. Wis. 1977); Liebman v. Peterson Coal & Oil Co., 63 F.R.D. 684 (N.D. Ill. 1974) (discussing sim- ilar factors in determining fee awards from common fund). Not all factors apply in a given case,’ and no one factor is controlling.’ 1974), is appropriate. Lynch v. City of Milwaukee, 747 F.2d 423, 427 (7th Cir. 1984). These factors are similar to the factors cited in the Code of Professional Responsibility. Johnson, 448 F.2d at 719; Lynch, 747 F.2d at 427. 11 In the court’s opinion, the second, fifth and sixth factors have little, if any, relevance to the request for fees in this case. 12.In addition, since several of these factors may overlap, the determination of one factor may also resolve issues pertaining to 32a As the first factor indicates, the starting point in the court’s analysis involves a determination of the number of hours reasonably expended on the litigation. This figure is then multiplied by the fees customarily charged in the locality for the services rendered to produce the “lodestar” figure. Waters, 502 F.2d at 1322. See also Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939 (1983); In ve Cenco Inc. Securities Litigation, 519 F.Supp. 322, 325-26 (N.D. Ill. 1981). After calculating the lodestar, the court may add an upward adjustment, or multiplier, to ensure that the fee award provides appro- priate compensation to the plaintiffs’ counsel for the work performed and the results achieved. GM has filed specific objections to the nine sets of timesheets submitted by plaintiffs’ counsel. The court will discuss these objections in its review of the individual petitions, infra. Before launching into a discussion of the individual petitions, however, the court will address several recurring objec- tions to the majority of the petitions. 1. Time Spent on Alleged “Lost” and “Abandoned” Claims GM argues that the hours claimed by plaintiffs’ attor- neys should be reduced to account for the unsuccessful appeal to the Seventh Circuit in Skelton and the claims allegedly abandoned in the course of the settlement nego- tiations. In Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 1940 (1983), the Supreme Court held: work on an unsuccessful claim cannot be deemed to have been ‘expended in pursuit of the ultimate result achieved.’ Davis v. County of Los Angeles, 8 E.P.D. (° 9444], 5049 [C.D. Cal. 1974]. The congressional intent to limit awards to prevailing parties requires another factor. For instance, the calculation of an hourly rate usually reflects the fees charged in a locality (factor three), and the experience, reputation and ability of the attorneys performing the services (factor seven). 33a that these unrelated claims be treated as if they had been raised in separate lawsuits, and therefore no fee may be-awarded for services on the unsuccessful claim. Following this language in Hensley, GM asserts that plaintiffs’ attorneys Boyle, Harte, Goodman and Gold- man are not entitled to any fees or expenditures in con- nection with the Skelton claims dismissed by the Seventh Circuit in Skelton v. General Motors Corp., 660 F.2d 311 (7th Cir. 1982), cert. denied, 456 U.S. 974, 102 S.Ct. 2238 (1983), and urges this court to disallow any fees for the time spent briefing the motions to dismiss before Judge Moran, the appeal to the Seventh Circuit, and the subsequent petition for certiorari. Plaintiffs’ counsel assert that the Hensley standards are inapplicable to fee awards under the common fund doc- trine, which permits reimbursement for all fees expended in the creation of a common fund. This position exag- gerates the distinctions between statutory and common fund fee awards. As stated earlier, the courts in this circuit apply the same criteria when determining awards for statutory fees and fees from a common fund. The common fund doctrine, like the statutory fee provisions, also instructs the court to analyze the fee petition to de- termine whether the plaintiffs “prevailed” on certain claims, and -whether the time expended contributed to the ultimate favorable resolution of the case. See e.g., Swan- son v. American Consumer Industries, 517 F.2d 555, 563 (7th Cir. 1975) (the fact that a plaintiff did not prevail on certain issues is entitled to weight in the determina- tion of an appropriate fee award). Kennedy v. Nicastro, 546 F.Supp. 267 (N.D. Ill. 1982); Zilker v. Klein, 540 F.Supp. 1196, 1198-99 (N.D. Til. 1982); In re Penn Cen- tral Securities Litigation, 416 F.Supp. 907, 917 (E.D. Pa. 1976), rev’d on other grounds, 560 F.2d 1138 (38d Cir. 1977). Accordingly, the court finds that the Hensley guidelines for assessing fees in statutory fee cases are 34a equally relevant to a determination of fees under the common fund doctrine."* Regardless of the analysis employed, however, the court finds that exclusion of all the time expended on the Skel- ton claims would be improper. The Seventh Circuit re- cently discussed Hensley’s limitation of fees to those reasonably expended on “prevailing” claims in Zabkowicz v. West Bend Co., 789 F.2d 540 (7th Cir. 1986). In Zabkowiez, the plaintiff filed a sexual harassment suit under Title VII which also contained pendent tort claims stemming from the alleged discriminatory conduct. The district court found that the defendants had violated Title VII, but it denied plaintiffs’ request for attorneys’ fees in its entirety because the hours were excessive and failed to distinguish between the time spent on the Title VII claim and the time spent on the state law claims. On appeal, the Seventh Circuit reversed, holding that the dis- trict court should consider the lawsuit as a whole, and take into account the interrelated nature of the various claims in the case when determining an appropriate fee award for a prevailing plaintiff. Zabkowicz, 789 F.2d at 551. The court instructed: Where several claims arise out of a common factual core or are based on related legal theories, separating ‘out the legal services rendered with respect to these overlapping claims would be an exercise in futility.’ In accordance with Hensley, we believe that prevail- ing plaintiffs may be entitled to compensation for time expended on such related claims. Id. (citation omitted). 13 The guidelines for assessing statutory fees originated in the standards commonly used to assess the reasonableness of a petition secking fees from a common fund. See supra note 9. See also In re Fine Paper Antitrust Litigation, 751 F.2d 562, 583 n.19 (3d Cir. 1984); Prandini v. National Tea, 557 F.2d 1015 (3d Cir. 1977) ; City of Detroit v. Grinnell Corp., 495 F.2d 448, 470-71 (2d Cir. 1974); In re Folding Carton Antitrust Litigation, 84 F.R.D. 245, 255-56 (N.D. Ill. 1979). / 35a The Zabkowicz court explained that the next inquiry involves whether the plaintiff’s unsuccessful claims are sufficiently related to the successful claims to justify an award of attorneys’ fees. It held: Hensley provides no precise method for determining whether claims are related or unrelated. Nonetheless, a ‘useful tool for making this determination is to focus on whether the claims seek relief for essentially the same course of conduct.’ ... From this perspec- tive, ‘an unsuccessful claim will be unrelated to a successful claim when the relief sought on the unsuc- cessful claim is intended to remedy a course of con- duct entirely distinct and separate from the course of conduct that gave rise to the injury on which the relief granted is premised.’ Id. (citations omitted). In order to determine whether the claims were sufficiently related, the court examined each claim separately. It found that, “although these claims are based on distinct legal theories, they unde- niably involve a common core of facts. The tort claims sought to remedy the same course of conduct that gave rise to the Title VII claims.” Jd. Accordingly, the Sev- enth Circuit remanded the question of attorneys’ fees to the district court, finding that the plaintiff may be en- titled to the entire amount of her fee claim, depending upon the “significance of the overall relief obtained... in relation to the hours reasonably expended on the litiga- tion.’” Jd. (citing Hensley, 461 U.S. at 435, 103 S.Ct. at 1940). Following Zabkowicz, the court finds that wholesale exclusion of the time expended on the Seventh Circuit appeal and petition for certiorari is not warranted in this case. See Lenard v. Argento, No. 85-1786, slip op. at 4 (7th Cir. January 6, 1987) (rejecting defendant’s “me- chanical claim-chopping approach” to attorneys’ fees). These claims alleged the same improper conduct and 36a sought the same remedy ultimately provided in the settle- ment agreement. In Jllinois Welfare Rights Organization v. Miller, 723 F.2d 564, 576 (7th Cir. 1983), the court held: If, ... the plaintiff has asserted unsuccessful claims related to the successful claims by a ‘common core of facts’ or that are based on ‘related legal! theories,’ . time spent on these related but unsuccessful claims should not automatically be excluded in arriv- ing at a reasonable attorney’s fees award. Instead, the court [should} focus en the overall results ob- tained to determine whether it should compensate the plaintiff for the hours spent on the related but unsuc- cessful claims. Generally, if the results obtained are excellent, the ‘| plaintiff’s] attorney should recover a fully compensatory fee,’ which will ‘[nJormally ... encompass all hours reasonably expended on the liti- gation... .’ If the plaintiff has achieved only partial success, however, compensating the plaintiff for all hours expended on the litigation may be excessive. In such a situation, the court may adjust the award either by identifying specific hours that should be eliminated or by simply reducing the overall award to reflect the plaintiff’s limited success. citing Hensley, 461 U.S. at 435, 103 S.Ct. at 1940. Thus, | although a reduction may be appropriate to reflect the — reasonableness of this time in light of the relief ultimately obtained,’ the court rejects GM’s argument that all of this time must be excluded from consideration when de- termining the proper fee award. See also Lenard v. Argento, No. 85-1786, slip op. at 4 (7th Cir. January 6, 1987) (where a lawyer “presents a congeries of theories each factually and legally plausible, he is not penalized because some, or even all but one, are rejected, provided that the one or ones that succeed give him all that he 14 The court has made some adjustments to reflect the relationship between these hours and the settlement agreement. 37a reasonably could have asked for.”) ; Ramos v. Lamm, 7138 F.2d 546, 556 (10th Cir. 1983) (reduction for lost claims may not be necessary if plaintiffs’ claims involve a com- mon core of facts or are based on related legal theories) ; Monroe v. United Air Lines, Inc., 565 F.Supp. 274, 285- 86 (N.D. Ill. 1983) (allowing fees for an unsuccessful preliminary injunction where the plaintiffs ultimately prevailed in the litigation). GM also seeks a reduction in hours to reflect the fact that plaintiffs relinquished some claims during the course of the settlement agreement. The foregoing discussion ap- plies with equal or greater force to these so-called ‘aban- doned” claims. Basically, to oversimplify, all of these claims involve different theories to redress the same wrong—GM’s. placement of THM 200 transmissions into automobiles requiring THM 350 transmissions. In Zab- kowicz, the Seventh Circuit recognized that, when a plain- tiff voluntarily dismisses a claim as part of a settlement vindicating his rights, a fee award based on all the plain- tiffs’ claims may be appropriate. Zabkowicz, 789 F.2d at 552. In the present case, the court never ruled on the remainder of the plaintiffs’ petitions for class certifica- tion, and it denied GM’s motions to dismiss. Plaintiffs’ counsel should not be penalized just because they relin- quished some claims in order to reach a comprehensive settlement agreement with GM. Sce Illinois Welfare Rights Organization v. Miller, 723 F.2d 564, 567 (7th Cir. 1983). Accordingly, the court rejects GM’s assertion that the fee award should be decreased to reflect the plain- tiffs’ dismissal of related claims in the course of the set- tlement negotiations. As a corollary to the arguments regarding the “lost” and “abandoned” claims, GM argues that the fee award should be reduced significantly to reflect the disparity be- tween the relief sought and the recovery obtained in the settlement agreement. Although the plaintiffs did not ob- tain relief on behalf of all the classes originally desig- 38a nated in the complaints, this does not diminish the very significant recovery obtained by class counsel in their pursuit of this litigation. As with any claim involving an area of uncharted law, plaintiffs were required to develop alternate theories for GM’s liability. This in- volved formulating innovative arguments to convince the court of the viability of pursuing these claims as a class action, and presenting the court with sufficient authority to defeat GM’s vigorous and able efforts to dismiss the litigation. Counsel’s very substantial efforts in this re- gard have not gone unrewarded. Through their efforts, millions of consumers across the country will be able to obtain reimbursement for costs incurred in attempts to repair their THM 200 transmissions. GM seeks to diminish the nature of plaintiffs’ under- taking and the level of their success. The record in this case and the size cf the settlement fund illustrate the substantia! benefits that plaintiffs’ counsel have conferred on the class. They achieved class certification in a na- tionwide Magnuson-Moss warranty action, and success- fully defeated GM’s repeated efforts to decertify the class and dismiss the case. Although they cannot claim direct credit for the settlement of the FTC action, it is a fair inference that the pendency of these cases had some ef- fect on the willingness of GM to enter the consent decree with the FTC. This agreement provided relief to puta- tive members of the class through the creatigpe of a Mediation and Arbitration panel. Finaily, the terms of the June 16, 1986 settlement agreement between GM and the plaintiffs clearly demon- strate the significant benefits that the class counsel achieved for many members of the class. In Jilinois Wel- fare Rights Organization v. Miller, 723 F.2d 564, 567 (7th Cir. 1983), the court recognized that Although some settlement agreements may be struc- tured so that they dispose of the original claims in a way that allows the court to decide whether a 39a particular claim has been ultimately successful or unsuccessful, this will not always be the case. In- deed, many settlements will be informally structured with an eye toward the achievement of overall ob- jectives, rather than the disposition of discrete claims. With these more general settlements, the analysis in Hensley regarding successful and unsuc- cessful claims may be unworkable, although the cen- tral teaching of Hensley will still apply. That teach- ing is that in every case the court must explicitly consider whether the fee is a reasonable one in light of the level of the plaintiff’s success. This case clearly presents a situation where the settle- ment was “structured with an eye toward the achieve- ment of overall objectives.”” Following the Seventh Cir- euit’s instruction in J/linois Welfare Rights, this court will focus on the reasonableness of the fees, and wiil not reduce the award merely because the recovery obtained is less than that requested at the outset of the litigation. 2. Time Spent on Class Certification Motions GM objects to the time expended on the motions for class certification, which, by GM’s calculation, surpasses 3200 billable hours. According to GM, this figure is com- prised of excessive “read and review time” and ‘“con- ference” time between the various sets of plaintiffs’ counsel. Although this 3200 figure appears excessive when considered in the abstract, the court finds that the procedural history of this case and the complex nature of this suit justifies the great majority of the hours claimed on the class certification motions ‘the court has made some reduction in hours for excessive review and conference time and other time of little benefit to the result achieved). By operation of the local rules of court, five district court judges presided over this litigation be- 40a tween 1978 and 1982." The necessary process of fami- liarization which accompanied each transfer to a new judge required some duplication of effort beyond the control of the class counsel. Each transfer necessitated some new briefing and updating of the class certification motions. The class counsel should not be penalized for the so-called “duplicative” hours spent familiarizing transfer judges with the background of a case and its pending motions. The complicated nature of this lawsuit, the extraordinary size of the class, and the uncertainty and continuing evolution of the law in this area also demanded a significant expenditure of time. Most of the time spent briefing and updating these motions was nec- essary and well-invested, and ultimately persuaded the court to certify at least one class of plaintiffs and to deny GM’s motion to dismiss. Accordingly, the court finds that an overall general reduction in fees for ex- cessive briefing is not warranted in this case.'® 3. Staffing at Court Appearances GM also accuses plaintiffs’ counsel of overstaffing at court appearances by providing several lawyers at some hearings where one or two lawyers would suffice. GM refers to several hearings to illustrate this objection. In general, the courts are reluctant to allow compensation for an abundance of attorneys appearing on a routine matter. See, e.g., In re Fine Paper Antitrust Litigation, 751 F.2d 562, 579 (3d Cir. 1984); In ve “Agent Orange” Product Liability Litigation, 611 F. Supp. 1296, 1307 15 The docket reflects the following chronology: Judge McGarr (1977-1979) (part of Engines); Judge Crowley (1979-1980); Judge Moran (1980-1982); Judge Getzendanner (May 1982-September 1982); Judge Nordberg (September 1982 to present). 16 The court has discussed individual instances of excessive billing in its section addressing the individual petitions. Even if some excesses did occur, they were not so rampant as to justify GM’s request for an across-the-board reduction in fees. 4la (E.D. N.Y. 1985); In ve Continental Illinois Securities Litigation, 572 F. Supp. 931, 933 (N.D. Ill. 1983); United States v. Allen, 578 F. Supp. 468, 483 (W.D. Wis. 1983). Where an attorney appears at a hearing as a “spectator” rather than a participant, he should not be compensated for his time in court because his presence does not materially advance the progress of the litigation. See In re Fine Paper, 751 F.2d at 579. If the cireum- stances of the hearing require the presence of more than one attorney, however, then the court should allow at- torneys’ fees to all necessary participants in the hearing. Although this court has presided over these cases only since May, 1982, it disagrees with GM’s characterization of plaintiffs’ alleged “overstaffing” at court appearances. These cases were not consolidated until late 1981. Prior to the consolidation, the counsel for Skelton and Newton had to appear separately because they had separate clients and were advancing different theories of recovery. Each transfer of the case necessitates an appearance by group counsel before the new transferee judge to fami- liarize the judge with the attorneys and the issues in the case. The number of attorneys which have appeared before this court between 1982 and 1986 has never seemed excessive to this court. For the most part, the attorneys who have appeared in the last four years ac- tively participated in the hearings and contributed to the advancement of the litigation. (The defendant has rou- tinely been represented by two lawyers at court appear- ances.) This court has not observed excessive attendance by counsel which would justify a decrease in the hours allowed. Accordingly, the court finds that the requested reduction for overstaffed court appearances is not war- ranted in this case. 4. Travel Time GM also objects to class counsel billing full rates for time spent travelling to other cities in pursuit of this litigation. With the exception of the Zwerling and Good- kind petitions, the fee petitions do not clearly delineate the hours that they seek to charge the fund for time spent on a plane or some other means of transportation. When questioned about the amount of in-flight time charged, plaintiffs’ counsel admitted that they charged for time spent in transit, but only if that time was actually spent working on the case. However, they did indicate that they were usually working on the case while in transit. It is this court’s experience that cramped working conditions, limited access to materials, frequent interruptions, and inevitable distractions render travel time much less productive than other time spent on a case. Accordingly, the court has reduced the hours claimed for travel to and from a given destination by 50%. See Orshan v. Macchiarola, 629 F. Supp. 1014, 1020 n.3 (E.D. N.Y. 1985); In ve “Agent Orange” Prod- uct Liability Litigation, 611 F. Supp. 1296, 1849 (E.D. N.Y. 1985}; Society jor Goodwill te Retarded Children v. Cuomo, 594 F. Supp. 994, 998 (E.D. N.Y. 1983)." 5. Attorney ee Rate When attorneys undertake to represent a class, their fees are usually contingent on the success of the class action, and they may not be paid for their efforts until several years after the action is commenced. This results 17 Some courts in this circuit have indicated that full compensa- tion for travel may be appropriate. See Henry v. Webermeier, 738 F.2d 188, 194 (7th Cir. 1984); Chrapliwy v. Uniroyal, Ine., 509 F. Supp. 442, 454-55 (N.D. Ind. 1981), aff'd in relevant part, 670 F.2d 760 (7th Cir. 1982), cert. denied, 461 U.S. 956, 103 S.Ct. 9428 (1983). The court acknowledges that a complete reduction in travel time is too harsh; however, it finds that travel time should be reduced to reflect the fact that, because of travel demands and inevitable distractions, these hours are not as beneficial or pro- ductive as time spent at the office or in court. Society for Good- will to Retarded Children v. Cuomo, 574 F. Supp. 994, 998 (TE.D. N.Y. 1983); Ryan v. Raytheon Data Systems Co., 601 F. Supp. 243, 256 (D. Mass. 1985). These reductions are set out in more detail in the discussion of the individual petitions. aey 40a in the loss of both the use and some of the value of money, thus prompting counsel to seek an adjustment for interest and inflation. In order to account for the effects of this delay in payment, the courts in this cir- cuit generally allow an attorney to submit his entire fee request caiculated in accordance with his current rate, which provides a rough approximation for the effects of delay. See, e.g., Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 764 (7th Cir. 1982), cert. dented, 461 U.S. 956, 108 S.Ct. 2428 (1983); Gautreaua v. Pierce, 690 F.2d 601, 612 (7th Cir. 1982), cert. denied, 461 U.S. 961, 103 S.Ct. 2438 (1983); Coleman v. Fierson, 607 F. Supp. 1578, 1581 (N.D. Ill. 1985); Phemister v. Harcourt Brace Jovanovich, Inc., 1984-2 Trade Cases { 66,234 at 7 66,996 (N.D. Ill. 1984).'* See also Ramos v. Lamm, 713 F.2d 546, 555 (10th Cir. 1983); In re “Agent 1S In Ohio-Sealy Mattress Manufacturing Co. v. Sealy, Inc., 776 F.2d 646, 663 (7th Cir. 1985), the Seventh Circuit acknowledged that a district court could compensate for the delay in payment by using current rates, but it was not required to do so. See also Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 764 n.16 (7th Cir. 1982), cert, denied, 461 U.S. 956, 1038 S.Ct. 2328 (1983). The Ohio-Scaly litigation spanned over fifteen years, and the trial court declined to employ current rates because it determined that current rates would produce a windfall to the plaintiff’s attorneys. The Seventh Circuit affirmed the refusal to use current rates, noting that “lwlhen a case lingers on for a long time, ... using current hourly rates may produce a windfall for the plaintiff since changes in hourly rates reflect not only inflation but also an attorney’s in- creased experience and. skill.” Jd. at 663. GM _ relies on this lan- guage to argue that the use of current rates will result in a wind- fall to class counsel in the prescnt case. This court disagrees. This litigation spanned a period of seven years, which witnessed peri- ods of very high inflation. Calculating all fees at or near current rates adequately offsets the loss generated by the delay in payment in this ease. See Chrapliwy v. Uniroyal, Inc., 509 F. Supp. 442, 457-58 (N.D. Ind. 1981), aff'd in relevant part, 670 F.2d 764 (7th Cir. 1982), cert. denied, 461 U.S. 956, 103 S.Ct. 2428 (1983) (affirm- ing calculation of fees at current rates for litigation spanning eight year period). eee 44a Orange” Product Liability Litigation, 611 F. Supp. 1296, 1310 (E.D. N.Y. 1985). In the present case, seven of the nine petitioners have requested fees at their current rates. The Sachnoff, Weaver firm and the firm of Charles A. Boyle seek fees at their historic rates, plus interest calculated at the prime rate for a given time period. Calculation of fees pursuant to this method produces significantly higher fees than those obtained by using the firms’ current rates.” Following the procedure generally accepted in this Circuit, the court finds that in this case the calcula- tion of reasonable fees on a current basis properly com- pensates all petitioning attorneys for the delay in pay- ment in this case. In calculating on a current basis the reasonable fee rate to be allowed each attorney in this case, the court took into account all relevant factors, including the bene- fit to the class, the skill and the difficulty of the legal work completed, time reasonably required and duplica- tion of efforts, current fee rates charged by the lawyer for similar services, current fee rates customarily charged 19 Calculating fees at historical rates plus a prime rate enhance- ment, Boyle’s petition totals $742,667.86. If calculated at current rates, his total requested fees are less than half that figure. Sim- ilarly, calculating Sachnoff’s hours at a historical rate with a prime rate enhancer produces fees much greater than the figure obtained by calculating fees in accordance with the firm’s current rates. In a supplemental submission, Boyle encourages this court to follow the decision of Judge Roszkowski in Airline Stewards and Stewardesses Assn., et al. v. Trans World Airlines, Inc., et al., 70 C 2071 (74 C 2063) (N.D. Ill. September 17, 1986). The court’s review of this case reveals that this decision does not support the prime rate interest enhancer requesfed by Boyle and Sachnoff. In Airline Stewards, Judge Roszkowski actually rejected an interest rate enhancement determined according to the prime rate. He found that the attorneys were entitled to an interest enhancement of 715 percent, the interest rate on a long-term treasury rate purchased at the start of the litigation. /d. at 4. 45a in the locality for similar legal services, the amount in- volved and results obtained, the experience, reputation, and legal ability of each lawyer, the difficulties in dealing with such a large class of claimants, and the contingency of the fee. The court is mindful of the chilling effect on future consumer class actions. that might result from failure to adequately compensate counsel for their efforts in this litigation. The Individual Petitioners Charles A. Boyle & Associates Ltd. Boyle requests compensation for 1764.80 hours at $200/hr. GM has four basic objections to Boyle’s peti- tion for fees. First, it argues that the time spent on the losing Skelton appeal should be eliminated in its en- tirety. As this court explained above, however, plaintiffs may still seek compensation for the time spent on the Skelton claims because they are related to the claims on which plaintiffs ultimately prevailed. However, the court finds that, since the pursuit of these claims did not fully contribute to the creation of the settlement fund, these hours should be reduced by 33%. The court’s review of Boyle’s petition reveals that he expended approximately 475 hours pursuing the Skelton claims in the district court, the appeal and the petition for certiorari. The court will permit compensation for 67% of those hours, or 318.25.” Second, GM accuses Boyle of excessive “read and re- view” time. Although every class action staffed by sev- eral groups of plaintiffs’ lawyers generates some neces- sary “read and review” time, it is this court’s role to ensure that the attorneys do not engage in excessive 20 The court has disallowed the costs of printing the briefs on ~ appeal. 46a reviews of each others’ work. See In re Fine Paper Anti- trust Litigation, 751 F.2d 562 (3d Cir. 1984); Lackey v. Bowling, 476 F. Supp. 1111, 1118 (N.D. Ill. 1979) ; Manual for Complex Litigation, § 24.22 at 189. The court has reviewed all of Boyle’s entries, and finds that, given his role in this litigation, his review time is, for the most part, sufficiently well-documented and within reason. GM’s third objection is closely related to the second one. GM accuses Boyle of engaging in too much “confer- ence” time with the other plaintiffs’ attorneys. Boyle’s fee petition contains references to a number of confer- ences, phone calls and meetings with the other members of class counsel. The court finds that Boyle’s conference time. like his “review” time, is not greatly excessive in light of the history and demands posed by this litigation (i.e., consolidation of two separate actions, transfer to several judges, and the protracted settlement negotia- tions). However, the court finds that the timesheets do reflect some duplication of effort and extensive reviewing and conferring with limited benefit to the class. There- fore, the court has reduced the requested hours by 10% to reflect this. Finally, GM asserts that Boyle charged premium rates for tasks which could be performed by paralegals. For the most part, these tasks included review of the case file and communication with class members. Generally, a senior attorney is not entitled to premium rates for ser- vices which could be performed by a paralegal or less ex- perienced attorney. See Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 767 n. 16 (7th Cir. 1982), cert. denied, 461 U.S. 956, 103 S.Ct. 2428 (1983); Daggett v. Kimmelman, 617 F.Supp. 1269, 1282 (D. N.J. 1985). After reviewing Boyle’s petition, the court finds that some of the hours claimed for senior attorney time should have been dele- gated to paralegals. The court has reduced Boyle’s time accordingly. See Daggett, 617 F.Supp. at 1282 (“It was the fee“applicant’s prerogative to staff every task involved _— 47a in this case with partners, but that does not automatically entitle the law firm to recover ‘partner rates’ for every- thing’’). The court notes that Boyle also seeks to charge fees for the time spent talking to the press.*! In the court’s view, this time should be compensated at 33% of the hourly rate because it involves minimum benefit to the class and does not involve a task which justifies full compensation for senior attorney time. Cf. Society for Goodwill to Re- tarded Children v. Cuomo, 574 F.Supp. 994, 998-99 (E.D.N.Y. 1983) (disallowing all time spent with media). GM also objects to Boyle’s list of expenses, which GM characterizes as overhead charges subsumed in Boyle’s hourly rate. See Ramos v. Lamm, 713 F.2d 546, 557, 559 (10th Cir. 1983); Roe v. City of Chicago, 586 F.Supp. 513, 516 (N.D. Ill. 1984). If a case involves unusual ex- penditures over and above the expenses necessary for the operation of a law firm, then these expenses are properly chargeable to the fund. Ramos, 713 F.2d at 559; In re “Agent Orange” Product Liability Litigation, 611 F.Supp. 1296, 1322 (E.D. N.Y. 1985). The criticized charges in Boyle’s petition include automated answering machine services, storage space and office supplies. Given the mag- nitude of the litigation and the necessity of establishing adequate facilities and support systems to respond to class inquiries and store class information, these expenses can- not be characterized as mere overhead expenses which should be included in Boyle’s hourly rate.* Corinblit & Seltzer The two principals of this firm seek compensation for a total of 100 hours that the firm expended on this litiga- tion. Jack Corinblit logged 41 hours at a claimed rate of 21 By the court’s calculation, this amounts to approximately 6 hours, 2 of which will be allowed. 22 However, the court has disallowed a public relations expense of $693.75. 48a $250/hr., and Mare Seltzer logged 59 hours at a claimed rate of $225/hr. These attorneys never appeared before the court on the case. From the timesheets, it appears that their primary involvement in this case was their participation in a deposition in December of 1980.** GM argues that the requested fees should be reduced because nearly all of their time was spent “conferring and reviewing” the work of other attorneys. After ana- lyzing these timesheets, the court concludes that their conference and review time is excessive, and has been re- duced accordingly. Corinblit’s timesheets reveal that over 23 of his 41 requested hours were spent in conferences with other class counsel. Over 16.5 hours of this con- ference time included Marc Seltzer, his partner. Seltzer logged 34 hours of conference time, and 13.25 hours of these conferences included Corinblit. The firm has not provided the court with any justification for its double- staffing at these conferences. In In re “Agent Orange” Product Liability Litigation, 611 F.Supp. 1296, 1325 (D. N.J. 1985), the court disallowed all time spent in confer- ences between partners and associates of the same firm. Although a wholesale elimination of conference time be- tween members of the Corinblit firm is not warranted under the facts of this case, the court finds that a reduc- tion in these hours is appropriate. In order to offset what might otherwise constitute double-billing, the court has reduced Corinblit’s request by 8.25 hours and Seltzer’s request by 6.5 hours. In addition, because the court finds that there has been little benefit resulting from excessive reviewing and conferring with other counsel, the court has reduced the requested hours by 20%. Abraham N. Goldinan & Associates, Ltd. GM objects to Goldman’s request for compensation in connection with the losing Skelton appeal. In accordance with the procedure employed in the Boyle petition, this 23 The court has calculated Corinblit’s fees at a rate of S200/hr. and Seltzer’s fees at a rate of $175/hr. ——" 49a court has determined Goldman is entitled to fees for 66% of the time expended on the Skelton appeal, and his time spent travelling to Washington, D.C. has been reduced 50% .?4 GM also aserts that Goldman’s hourly rates are exces- sive in light of his experience. Mr. Goldman started prac- ticing shortly before these cases were commenced. The court has taken his experience into account when setting the appropriate hourly rate.” Finally, GM objects to Goldman’s request for premium compensation for so-called “clerical tasks.” The statutory prerequisites of Magnuson-Moss class actions necessitated many communications with class members. Goldman’s re- sponsibilities in this litigation involved substantial com- munication and interaction with individual members of the plaintiff class. His staff included several paralegals who were given significant responsibilities in organizing and maintaining the records of the plaintiff class mem- bers. His ability to delegate is reflected in the fact that he claims approximately 2,000 attorney hours and over 5,500 paralegal/data entry hours. See Phemister v. Harcourt-Brace Jovanovich, Inc., 1984-2 Trade Cases © 66,234 at 66,996 (N.D. Ill. 1984). However, the nature of Mr. Goldman’s involvement in this case was primarily administrative. The court has reduced his time by 10% to reflect the fact that the tasks he undertook toward the end of the litigation were primarily administrative in na- ture, as well as to adjust for the extensive time spent on conferences, reading and reviewing, with limited benefit to the substantive legal issues in the case. Goodkind, Weschler, Labaton & Rudoff The Goodkind, Weschler firm filed the Morgan and Attard actions in New York, which were transferred to *4The court has reduced his requested hours by four hours to reflect time spent traveling. 25 The court has calculated Mr. Goldman’s fees at a rate of $150/hr. 50a this court in conjunction with the settlement. These ac- tions were informally stayed in 1983 pending this court’s ruling on the class certification motions. Before this stay, these attorneys successfully defeated GM’s motion to dis- miss, and commenced discovery in these actions. The firm seeks a total of $378,207.07 in fees for over 1600 hours of work.*° GM’s major objection to this firm’s fee petition is that it is too vague to permit any meaningful review. The firm’s timesheets are on a computer printout, and are admittedly brief. The firm has supplemented its peti- tion in its reply brief, however, and the entries are not so cursory that they preclude this court from determining their accuracy. See Berberena v. Coler, 753 F.2d 629, 634 (7th Cir. 1985) (entries are sufficient if they identify the substance of the work performed). The firm delegated a great deal of the responsibility for the prosecution of the actions to lower-level associates and paralegals. However, there was an extensive amount of time spent on confer- ences, reading and review with some duplication. There- fore, the court has reduced the requested legal hours by 10% and paralegal time by 5%. In accordance with the court’s guidelines for travel time set forth above, the court has reduced the time claimed for work while travelling to and from Chicago by 50%.?" “6 The court has calculated the firm’s fees at the following hourly rates: Attorney Rate/Hr. S. Weschler $220 E. Labaton $220 W. Kass $200 R. Schacter $160 L. Sucharow $150 J. Plasse $120 M. Isaacs $ 70 E. Perry $ 70 In determining these hourly rates, the court considered the fact that most of these hours were expended between 1980 and 1983. “7 The court has disallowed ten hours of travel time. 5la Francis E. Goodman, P.C. - Goodman’s fee petition seeks compensation for 451.70 hours of time at a rate of $150/hr. GM asserts that this petition should be substantially reduced or denied in its entirety because Goodman contributed very little in the case, and he spent most of his time reviewing the work of other attorneys. Goodman’s petition is replete with en- tries seeking compensation for his review time. Although this court was not able to dbserve Mr. Goodman’s role in the early stages of the litigation, he has not been a pri- mary player since these cases were transferred to this court in 1982. Given his limited role since that time, the court finds that he is not entitled to compensation for all of his time spent in conferring and reviewing the work of the other attorneys more heavily involved in the litiga- tion. The court disagrees with GM’s argument that all this review time must be disallowed, however. The court has determined that a 25% reduction in the hours claimed is appropriate to reflect the limited benefit from Good- man’s hours expended in this litigation. See In re Fine Paper Antitrust Litigation, 751 F.2d 562, 579 (3d Cir. 1984); In re “Agent Orange” Product Liability Litiga- tion, 611 F.Supp. 1296, 1325 (D. N.J. 1985); United States v. Allen, 578 F.Supp. 468, 483 (W.D. Wisc. 1983). GM also requests a reduction in Goodman’s hours to reflect time spent on the losing Skelton claims. Consistent with the procedure adopted for these claims in the Boyle and Goldman petitions, the court has determined that . Goodman’s time spent on these claims should be reduced by 33%. William J. Harte, Ltd. Harte requests attorneys’ fees and costs totalling $438,456.94. GM argues that his request should be dimin- ished to reflect the time spent on the losing Skelton ap- peal. The court finds that, for the reasons set forth on pages 10-13, supra, a complete elimination of this time is unwarranted.** Although the court will alow compensa- *8 The court has reduced costs associated with the Skelton appeal and petition for certiorari. 52a tion for time spent on these claims, the attorney and para- legal time will be reduced 33% to reflect its contribution to the ultimate settlement of this action. GM also accuses Harte of poor record-keeping and vague entries. Although several entries are somewhat cursory, this court is sufficiently familiar with Harte’s important role in the litigation to permit these entries without a request for clarification. Berberena v. Coler, 753 F.2d 629, 634-(7th Cir. 1985). However, because of the extensive amount of time spent on conferences, read- ing, and review with limited benefit to substantive legal presentation, the court has reduced the requested hours of Mr. Harte by 10% and for similar reasons the para- legal time by 5%. Law Offices of Beverly C. Moore, Jr. Moore’s petition requests compensation for nearly 4,000 hours of attorney time and over 1,400 hours of paralegal time. GM raises several objections to Moore’s request for fees and expenses. First, GM disputes Moore’s requested hourly rate of $175/hour, and argues that Moore has insufficient experience to justify such a high fee. Taking into account all the relevant factors previously referred to, the court finds that Moore is entitled to compensation at a rate of $140/hr. Although Moore provided research for the class certification briefs, and demonstrated some expertise in addressing problems posed by this class ac- tion, his rate should reflect, among other things, the fact that he does not have a great deal of litigation experi- ence. Second, GM challenges Moore’s request for fees in con- nection with the Fritz action. Moore filed this action in the federal district court for the District of Columbia in 1984, shortly before this court issued its interim ruling. After the interim ruling, Moore secured an order trans- ferring the case to this court. The court agrees with GM that the filing of this case did nothing to advance 53a the progress of this litigation or achieve the ultimate settlement of the case. In Jn re “Agent Orange” Product Liability Litigation, 611 F. Supp. 1296, 1307 (E.D. N.Y. 1985), the court noted: One instance of duplicative work arising from the nature of a class action, . . . concerns the filing of individual lawsuits by class members. Attorneys who file individual suits on the same claims involved in the class action do not substantially aid the prose- cution of the class action. These collateral cases ulti- mately are dismissed as duplicative. An award of fees for such ‘me too’ litigation would encourage fruitless and unnecessary work. Moore’s filing of the Fritz action in Washington, D.C. is a perfect example of “me too” filing of duplicative litigation criticized in Agent Orange. It is significant that none of the other class counsel joined Moore in the filing of this action, nor do they seek any fees in connec- tion with it. The court finds that Moore is not entitled to any fees or expenses in connection with the Fritz case because this action involved unnecessary expenditures of time and money which bear no relation to the favorable settlement in this case or the creation of the settlement fund.*° Moore did not join the other plaintiffs’ counsel in the settlement agreement. In fact, he strongly resisted the settlement which created the common fund. GM argues that Moore should not be compensated for the time spent resisting the settlement, because these efforts hindered the settlement negotiations instead of helping them. The court agrees with GM that Moore is not entitled to full compensation for the time spent objecting to the settle- ment. The fund does not have to pay attorneys’ fees for the time spent objecting to its creation. Although Moore’s 29 By the court’s calculation, Moore spent 155.8 hours of attorney time and 73.3 hours of paralegal time on the Fritz action. 54a time spent on the settlement is not fully compensable, the courts finds that he is entitled to some remuneration for his participation in the settlement processes. An ob- jector to a settlement process often sharpens the issues and may achieve additional benefits for the class. Al- though he opposed the settlement, Moore’s participation in the settlement negotiations cannot be dismissed in its entirety. Therefore, the court has determined that he is entitled to 50% of his time in the settlement stake of the case. Moore took one trip to Reading, Pennsylvania and ap- proximately seventeen trips to Chicago. Consistent with the guidelines set forth supra on page 18, the court has reduced his work travel time by 50%.*° The court has also reduced Moore’s time spent talking with the media to 33% See Society for Goodwill to Retarded Children, 574 F. Supp. 994, 998-99 (E.D. N.Y. 1983).°' Because of the very extensive amount of time spent on confer- ences, reading and review, and especially preliminary matters long before litigation commenced, with the very limited benefit to the success of the case, the court has reduced the requested hours of Mr. Moore by 40% and paralegal time by 11%. Moore requests expenses totalling $43,206.98. GM ar- gues that some of these expenses are not compensable because they should be considered part of overhead. See In re Fine Paper Antitrust Litigation, supra. In par- 30 Moore seeeks compensation for 17 trips to Chicago. 31 The court rejects Moore’s request for compensation for the following entries unrelated to the present class action: 2/19/85 T/C w/Ben Todd re Pope v. GM 4.7 12/03/82 Prepare Findex of Briefs 11.0 10/25/79 T/C w/W.Va. attys in Ford Piston scuffing case 1.0 8/12/79 Watched Report on NBC program \ Prime Time Sunday 3 55a ‘ticular, GM argues that the charges for overtime word processing should have been subsumed in Moore’s hourly rate. The court disagrees. Given Moore’s role in the briefwriting process, the resort to overtime staff to com- plete the pleadings in this case was sufficiently necessary and predictable. The court does not view these charges as unreasonable. Sachnoff, Weaver & Rubenstein, Ltd.™ GM’s major objection to Sachnoff’s entries revolves around the firm’s request for computation of fees at his- toric rates with an upward adjustment to reflect interest calculated at the prime rate. The court’s has decided that it is in the interests of justice to award all fees on a current basis, regardless of when the work was per- formed.** 382 However, most of Moore’s miscellaneous expenses have been eliminated because they bear no apparent relationship to this ac- tion (ex: bank service charges, post cards, tape recorder, maga- zine). 33 The Sachnoff firm is the only firm that requests reimbursement for its time spent preparing a fee petition. Some of this time was spent preparing the firm’s own petition and some was expended preparing the joint briefs filed by the class counsel in this case. In general, the courts have agreed that this time is nut compensable in common fund cases because it is clearly not time spent creating, preserving or enlarging the fund. Jn re Fine Paper Antitrust Litigation, 751 F.2d 562, 579 (3d Cir. 1984); City of Detroit v. Grinnell Corp., 560 F.2d 1093, 1102 (2d Cir. 1977); Lindy Brothers, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102, 111 (3d Cir. 1976); Bailey v. Heckler, 621 F. Supp. 521, 524 (W.D. Pa. 1985); Hew Corp. v. Tandy Corp., 480 F. Supp. 758, 764 n.10 (D. Mass. 1979); Population Services International v. Carey, 476 F. Supp. 4, 7 n.3 (S.D. N.Y. 1979) ; Spiekerman v. Whit- taker Corp., 598 F. Supp. 1, 8 (B.D. N.Y. 1978). The court will follow this rule and disallow the time spent preparing the fee petition for the Sachnoff firm. However, the court will allow $15,000 for the time spent drafting the joint brief. ’4 The court has awarded the Sachnoff firm fees at the following rates: 56a GM also accuses the Sachnoff firm of overbilling and vague time keeping. The overbilling charge stems from GM’s assertion that the hours spent on “abanonded claims” and the time spent briefing the class certification motions must be reduced to reflect the limited nature of the relief obtained. These objections have been addressed in earlier portions of the opinion. Suffice it to say that this firm has been at the forefront of this litigation and has played a major role in achieving the creation of the settlement fund. The Sachnoff firm has fulfilled a lead role and has submitted high quality work throughout this litigation. Because of the extensive amount of time spent on conferences ‘including intra-firm conferences), read- ing and review, with a limited benefit for same, the court has reduced the requested hours by 5% and paralegal time by 5%.” Zwerling, Schacter & Zwerling Zwerling, Schacter is a New York-based firm which was formed in January of 1985, after its partners left the Goodkind, Weschler firm. The firm has acted as co- counsel with Goodkind in the Morgan and Attard actions from January of 1985 to the present. It requests com- pensation for 90.30 hours of attorney and paralegal time. The court has reviewed the firm’s timesheets, and Attorney Rate/Hr. L. Sachnoff $240 B. Rosen $145 M. Tenenbaum $125 M. Denlow $110 C. Watkins $135 J. Schumacher $130 J. Feldman $ 80 D. Morris $ 70 M. Kaufman $ 90 35 The court has reduced the award by 17 hours (10 for BAR, 7 for JAS) for travel time and 5 hours spent speaking to Mr. Moore about the Fritz action. 57a has reduced travel time by 50% for the reasons previ- ously indicated." Because of the very extensive time spent on conferences and review, again the court has reduced the requested hours by 20%. Request for a Multiplier Having calculated the proper lodestar amount for plaintiffs’ attorneys, the court now turns io plaintiffs’ request for an upward adjustment of .75 to be added to the lodestar. The class counsel argues that this multi- plier of 1.75 is necessary to compensate them for the contingent nature of the lawsuit and the significant risks undertaken by them in this case. General Motors dis- putes the propriety of a multiplier on two grounds. First, it asserts that multipliers are never available un- der the statutory fee provision in the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310(d) (2). Second, it main- tains that, even if a multiplier were available, the facts of this case do not warrant any upward adjustment of the basic lodestar amount. These actions were commenced and prosecuted under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. A significant portion of the class counsels’ time was expended investigating the individual claims to ensure that the Act’s 100-plaintiff requirement [See 15 U.S.C. § 2310(d) (3) (¢e)] was fulfilled (See Joint Memorandum in Support of Class Counsels’ Fee Petitions at 6, 12 n.1, 14 n.2). Plaintiffs sought, and ultimately obtained, class certification under the Magnuson-Moss Act. See Interim Order, Skelton v. General Motors Corp., No. 79 C 1248 (N.D. Ill. December 20, 1984). Under these circum- stances, even if the fee award is based on the common fund doctrine, any limitation contained in the Magnuson- Moss Warranty Act is a relevant consideration in deter- mining whether to award a “risk” multiplier in this %6 The court reduced Mr. Schachter’s hours by 4 to reflect time spent traveling to and from Chicago. 58a case. The structure of the settlement agreement should not divert the court from the Congressional intent under- lying the passage of this Act. Magnuson-Moss permits a court to award a successful plaintiff a sum equal to the aggregate amount of costs and expenses (including attorneys’ fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action.... 15 U.S.C. $2310(d) (2) (emphasis supplied). GM ar- gues that the language underscored above precludes this court from awarding a multiplier in a Magnuson-Moss case. Unlike most fee-shifting statutes, which permits awards of “veasonable” attorneys’ fees, this Act appears to place a ceiling on the fees that a court may award a successful plaintiff. The plain language of the statute would seem to preclude any upward multiplier adjust- ment of the attorneys’ fees awarded to a successful plain- tiff. In Ventura v. Ford Motor Co., 173 N.J. Super. 501, 414 A.2d 611, 612 (1980), aff'd, 180 N.J. Super. 45, 433 A.2d 801 (1981), the court denied a request for a multi- plier of four, concluding that, “Taln attorneys’ fee al- lowance under the Magnuson-Moss Warranty Act is lim- ited to ‘actual time expended’ but may exceed actual bill- ings to a prevailing party if ‘reasonably incurred.’ ”’ The court agrees with GM and the Ventura court that Section 2310(d) (2) evinces a Congressional intent to limit the fee award to the time actually expended in pursuit of a plaintiff’s claim. Accordingly, the court concludes that a plaintiff in a Magnuson-Moss case is not entitled to an upward multiplier adjustment of the fees awarded. However, even if § 2310(d) (2) does not prohibit a fee award which includes a multiplier, the court finds that the background of this litigation does not justify an in- 59a crease in the lodestar figures set forth in this opinion. This lawsuit was settled at a relatively early stage of the litigation. In view of the fee rates and hours al- lowed, this case does not present the exceptional circum- stances, the exceptional kind of risk, or the exceptional success that warrants the use of a multiplier. In the past, courts in both common fund and statutory fee cases have permitted upward adjustments of the lode- star figure to compensate plaintiffs’ counsel for the delay in payment, the contingent nature of the lawsuit, su- perior representation, the risk of litigation : 1d the ex- ceptiona! quality of the results obtained. See, e.g., Inter- national Travel Arrangers, Inc. v. Western Airlines, Inc., 623 F.2d 1255, 1273-74 (8th Cir.), cert. denied, 449 U.S. 1063, 101 S.Ct. 787 (1980); Kamberos v. GTE Auto- matic Electric, Inc., 603 F.2d 598, 604 (7th Cir. 1979), cert. denied, 454 U.S. 1060, 102 S.Ct. 612 (1981) ; North- cross v. Board of Education, 611 F.2d 624, 638 (6th Cir. 1979), cert. denied, 447 U.S. 911, 100 S.Ct. 2999 (1980) ; City of Detroit v. Grinnell Corp., 495 F.2d 448, 471 (2d Cir. 1974); Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161, 168 (3d Cir. 1973) ; Phemister v. Harcourt-Brace Jovanovich, Inc., 1984-2 Trade Cases { 66,234 at 66,997 (N.D. II. 1984). In Hensley, 461 U.S. 424, 435, 103 S.Ct. 1933, 1940 (1983), the Supreme Court implicitly affirmed this practice holding that Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified. Hensley, 46 U.S. 424, 435, 103 S.Ct. 1933, 1940. In the past few years, however, the Supreme Court and the appellate courts of this circuit have begun to 60a question the propriety of awarding a multiplier to the basic lodestar figure. See, e.g., Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 106 S.Ct. 3088 (1986): Blum v. Stenson, 104 S.Ct. 1541 (1986); In re Burlington Northern, Inc. Employment Practices Litiga- tion, 803 F.2d 279 (7th Cir. 1986); Kirchoff v. Flynn, 786 F.2d 320 (7th Cir. 1986); McKinnon v. City of Berwyn, 750 F.2d 1383 (7th Cir. 1984); Bonner v. Coughlin, 657 F.2d 931 (7th Cir. 1981). In Blum v. Stenson, the plaintiffs filed a § 1983 class action against the New York State Department of Social Services, chal- lenging the state’s method of allocating Medicare Bene- fits. The case was decided on cross motions for summary judgment after only one set of plaintiffs’ interrogatories had been served and answered. See generally Stenson v. Blum, 476 F.Supp. 1331 (S.D. N.Y. 1979). The order granting summary judgment certified the class and en- tered final judgment for the plaintiffs. The Second Cir- cuit affirmed this ruling, and the plaintiffs’ counsel then petitioned the district court for an award of attorneys’ fees pursuant to 42 U.S.C. § 1988. The district court de- termined a lodestar amount. and then awarded plaintiffs’ counsel an upward adjustment of 50% to reflect ‘the quality of representation, the complexity of the issues, and the ‘great benefit to the large class’ that was ac- hieved.” Blum, 465 U.S. at 891, 104 S.Ct. at 1545, citing Stenson v. Blum, 512 F.Supp. 680, 685 ($.D. N.Y. 1981). The Second Circuit affirmed this award, and defendants appealed to the Supreme Court. The Supreme Court rejected at the outset defendants’ argument that a multiplier is never permissable. blum, 465 U.S. at 897, 104 S.Ct. at 1548. It indicated, how- ever, that multipliers should not be granted as a matter of course, and are appropriate only in rare cases which produce exceptional results. The court noted that, “'wlhen ... the applicant for a fee has carried his burden of showing that the claimed rate and number of hours are reasonable, the resulting product is presumed 61la to be the reasonable fee contemplated by [the statute].” Blum. 465 U.S. at 897, 104 S.Ct. at 1548 (emphasis added). The Court then analyzed the four reasons that the dis- trict court articulated for allowing an enhanced fee award. With respect to the novelty and complexity of the issues, the court held: The novelty and complexity of the issues presumably were fully reflected in the number of billable hours recorded by counsel and thus do not warrant an up- ward adjustment in a fee based on the number of billable hours times reasonable hourly rates. There may be cases, of course, where the experience and special skill of the attorney will require the expendi- ture of fewer hours than counsel normally will be expected to spend on a particularly novel or complex issue. In those cases, the special skill and experience of counsel should be reflected in the reasonableness of the hourly rates. Neither complexity nor novelty of the issues, therefore. is an appropriate factor in determining whether to increase the basic fee award. Id. at 898. 104 S.Ct. at 1548-1549. Similarly, the Court also held that the “quality of representation is also re- flected in the hourly rate, and may justify an upward adjustment “only in the rare case where the fee appli- cant offers specific evidence to show that the quality of service rendered was superior to that one reasonably should expect in light of the hourly rates charged and that the success was ‘exceptional.’ ” Blum, 465 U.S. at 899. 104 S.Ct. at 1549. The Court also held that, since the “results obtained” are generally factored into the de- termination of the lodestar, “it normally should not pro- vide an independent basis for increasing the fee award.” Id. (footnote omitted). Finally, because plaintiffs had not alleged an enhancement for the risk incurred in litigat- ing this action, the Court held that a multiplier for “risk” was inappropriate. It expressly declined to decide whether 62a risk of not prevailing could ever justify an enhancement of the fee award. Jd. at 900 and n. 16, 104 S.Ct. at 1550 and n. 16. In Pennsylvania v. Delaware Valley Citizens Council for Clean Air, 106 S.Ct. 3088 (1986), the Court reiterated Blum’s restrictive approach to multipliers in statutory fee cases. The Delaware Valley plaintiffs were awarded a multiplier to reflect the “superior” quality of represen- tation and the contingent nature of the case. Following the position set forth in Blum, the Court held that the award of a multiplier for superior representation was clearly inappropriate. It noted: A strong presumption that the lodestar figure—the product of reasonable hours times a reasonable rate —represents a ‘reasonable’ fee is wholly consistent with the rationale behind the usual fee shifting stat- ute, including the one in the present case. These statutes were not designed as a form of economic relief to improve the financial lot of attorneys, the aim of such statutes was to enable private par- ties to obtain legal help in seeking redress for in- juries resulting from the actual or threatened viola- tion of specific federal laws. ... In short, the lode- star figure includes most, if not all, of the relevant factors comprising a ‘reasonable’ attorneys’ fee, and it is unnecessary to enhance the fee for superior performance in order to serve the statutory purpose of enabling plaintiffs to secure legal assistance. 106 S.Ct. at 3098, 3099. The Court reserved ruling on the issue of whether a multiplier can be justified by the risk of loss, and set the matter for reargument next term. Id. at 3190. In the present case, the only grounds on which plain- tiffs request a multiplier is the alleged 1isk of loss. In McKinnon v. City of Berwyn, 750 F.2d 1383, 1392 ‘7th Cir. 1984), the court noted that, “‘/i]n this circuit, the 29, 0352 ‘fr risk of losing ‘alone does not justify the use of a multi- lier,” citing Bonner v. Coughlin, 657 F.2d 931, 936 (7th Cir. 1981). The McKinnon court explained its res- ervations in connection with a “risk bonus”: ? I The fundamental problem of a risk bonus is that i compensates attorneys, indirectly but effectively, for bringing unsuccessful civil rights suits, even though the attorney’s fee statute is expressly limited to cases where the party seeking the fee prevails. ... Sup- pose a plaintiff asks for and receives a multiplier of 2 because he had a 50 percent chance of losing the case. This means that if the plaintiff’s lawyer tries 10 such cases and wins 5 (as one would expect, if the risk of loss is indeed 50 percent), he will be paid as if he had won them all; that is, he will be paid twice his normal charge for each of the 5 cases he won, to compensate him for getting nothing for the eases he lost. Indeed, if the logic of the risk multi- plier were applied consistently, the attorney’s fee would be larger the riskier the case, even though this would mean rewarding lawyers for flooding the courts with unmeritorious litigation, something we very much do not need. Imagine a class of cases where only one in 50 plaintiffs prevails. Then the risk multiplier would be 50, and a lawyer who brought all 50 cases and lost 49 would receive the same compensation [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_1357%3A1. Public record. Not legal advice.