United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
Counsel for the plaintiffs seek an award of attorney's
fees, reimbursement of reasonable expenses incurred in
prosecuting this action, and compensation for the named
plaintiffs from a common fund created from the class action
settlement. The Court has reviewed Class Counsel's
request and supporting evidence, as well as attorney's
fees and class representative awards from similar cases. For
the reasons stated herein, the Court will grant the motion.
detailed procedural history and description of the settlement
agreement is set forth in the Court's Memorandum Opinion
on final approval of the class action settlement, issued
concurrently with this Order. In sum, the parties have agreed
to settle the plaintiffs' class action ERISA claims,
which are based on alleged breaches of duties of prudence and
loyalty and prohibited transactions arising out of the
defendants' management of the BB&T employee
retirement plan. The proposed settlement provides for a
common fund of $24 million as well as other non-monetary
relief in exchange for, inter alia, a release of
ERISA-related claims on behalf of the approximately 72, 000
class members. The settlement also allows for an award of up
to $8, 000, 000 in attorney's fees, $1.1 million in
attorney's expenses, and service awards of $20, 000 for
each of the representatives.
with this provision, Class Counsel asks this Court to approve
an award of $8, 000, 000 in attorney's fees, reflecting
one-third of the monetary recovery, reimbursement of $768,
176.42 in litigation expenses, and case contribution awards
of $20, 000 for each of the class representatives. Doc. 444;
Doc. 449. The defendants have not opposed the motion.
class action, the court may award reasonable attorney's
fees and nontaxable costs as authorized by law or by
agreement. Fed.R.Civ.P. 23(h). In a common-fund case such as
this, “a reasonable fee is based on a percentage of the
fund bestowed on the class.” Blum v. Stenson,
465 U.S. 886, 900 n.16 (1984). District courts in the Fourth
Circuit prefer the percentage method in common-fund cases,
including ERISA cases, see Kruger v. Novant Health,
Inc., No. 1:14CV208, 2016 WL 6769066, at *2 (M.D. N.C.
Sept. 29, 2016); Smith v. Krispy Kreme Doughnut
Corp., No. 1:05CV00187, 2007 WL 119157, at *1 (M.D. N.C.
Jan. 10, 2007), and “the vast majority of courts of
appeals now permit or direct district courts to use”
this method. Manual for Complex Litigation § 14.121 (4th
ed. 2018); id. at n.483, n.484, n.485 (collecting
determine the reasonableness of the fee award, courts begin
by considering the twelve factors identified in Barber v.
Kimbrell's, Inc.: “(1) the time and labor
expended; (2) the novelty and difficulty of the questions
raised; (3) the skill required to properly perform the legal
services rendered; (4) the attorney's opportunity costs
in pressing the instant litigation; (5) the customary fee for
like work; (6) the attorney's expectations at the outset
of the litigation; (7) the time limitations imposed by the
client or circumstances; (8) the amount in controversy and
the results obtained; (9) the experience, reputation and
ability of the attorney; (10) the undesirability of the case
within the legal community in which the suit arose; (11) the
nature and length of the professional relationship between
attorney and client; and (12) attorneys' fees awards in
similar cases.” 577 F.2d 216, 226 & n.28 (4th Cir.
1978) (adopting factors from Johnson v. Ga. Highway
Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974),
abrogated on other grounds by Blanchard v. Bergeron,
489 U.S. 87, 92-93 (1989)).
should also conduct a lodestar cross-check that compares the
requested contingent fee award against a fee calculated based
on hours spent at prevailing market rates. See Boyd v.
Coventry Health Care, Inc., 299 F.R.D. 451, 462 (D. Md.
2014). “The purpose of a lodestar cross-check is to
determine whether a proposed fee award is excessive relative
to the hours reportedly worked by counsel, or whether the fee
is within some reasonable multiplier of the lodestar.”
Id. at 467. Courts often use the lodestar method to
cross-check the reasonableness of a percentage fee. Jones
v. Dominion Res. Servs., Inc., 601 F.Supp.2d 756, 759-60
(S.D. W.Va. 2009) (collecting cases). To determine the
lodestar, courts multiply the reasonable hourly rate for each
attorney by the number of hours reasonably expended.
Grissom v. The Mills Corp., 549 F.3d 313, 320 (4th
Cir. 2008). When the lodestar method is used only as a
cross-check, however, courts need not “exhaustively
scrutinize” the hours documented by counsel and
“the reasonableness of the claimed lodestar can be
tested by the court's familiarity with the case.”
Goldberger v. Integrated Res., Inc., 209 F.3d 43, 50
(2d Cir. 2000). Typically a reasonable rate is calculated by
looking at the local market, see Burrs v. United Tech.
Corp, No. 1:18-CV491, 2019 WL 1430258, at *1 (M.D. N.C.
Mar. 29, 2019), but a national market rate is appropriate for
matters involving complex issues requiring specialized
expertise, such as ERISA class actions. See Kruger,
2016 WL 6769066, at *4.
Counsel's request for a fee of $8 million, reflecting
one-third of the monetary recovery provided to class members
in the settlement agreement, is reasonable following
consideration of the twelve Barber factors. Class
Counsel spent over 16, 000 attorney hours and 2, 200 hours of
non-attorney time to this matter, a significant investment of
labor and resources. See Doc. 445 at 6; Doc. 445-5
at ¶ 3; Doc. 445-3 at ¶¶ 4-6. ERISA litigation
is a “rapidly evolving and demanding area of law”
in which “[n]ew precedents are frequently
issued.” In re Wachovia Corp ERISA Litig., No.
3:09cv262, 2011 WL 5037183, at *4 (W.D. N.C. Oct. 24, 2011).
This, and the “significant risk of nonpayment” in
ERISA matters generally, see Kruger, 2016 WL
6769066, at *4, tend to indicate that recovery requires
navigating novel issues and applying specialized skills.
Class Counsel credibly testified that taking on a large class
action like this “impacts the firm's ability to
handle other class actions or pursue other less risky
matters, ” Doc. 445-1 at ¶ 30, and thus comes at
some opportunity cost.
one-third fee is consistent with the market rate in complex
ERISA matters such as this and reflects a customary fee for
like work. See Kruger, 2016 WL 6769066, at *2
(collecting cases). Class Counsel has also credibly described
their expectation that this matter would be vigorously
defended by BB&T, as it was, and would require
considerable resources, as it has. Doc. 445-1 at ¶¶
26-29. Class Counsel recovered monetary relief reflecting 19%
of $124 million in total damages sought by the plaintiffs
after summary judgment, as well as non-monetary relief and
tax benefits that will add approximately $15 million in
additional monetary value for class members. See
Doc. 445 at 12-14 (estimating a total settlement value of
courts have recognized the considerable skills and ability of
lead counsel, Mr. Schlichter and his firm, in ERISA matters,
see, e.g., Beesley v. Int'l Paper Co., No.
06-703, 2014 WL 375432, at *2 (S.D. Ill. Jan. 31, 2014);
Will v. Gen. Dynamics Corp., No. 06-698, 2010 WL
4818174, at *2-3 (S.D. Ill. Nov. 22, 2010), and have
recognized that this firm's work on behalf of retirement
plan beneficiaries has resulted in reductions of
recordkeeping fees on retirement plans in the United States
overall. Nolte v. Cigna Corp., No. 2:07-cv-2046-
HAB-DGB, 2013 WL 12242015, at *2 (C.D. Ill. Oct. 15, 2013).
Co-counsel Nichols Kaster has appeared in ERISA matters and
has received similar recognition. See Johnson v. Fujitsu
Tech. & Bus. Of Am., Inc., No. 16-3698, 2018 WL
2183253, at *6-7 (N.D. Cal. May 11, ...