United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
CATHERINE C. EAGLES, DISTRICT JUDGE.
two class actions arose out of defendant Duke
University's management of a retirement plan for its
employees. After discovery and initial summary judgment
briefing in the first matter, the parties reached a
settlement, which the Court has approved. Class Counsel seek
attorney's fees, reimbursement of expenses incurred in
prosecuting these cases, and compensation for the class
representatives from a common fund created from the ERISA
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. The attorney's fees and expenses sought
here are reasonable and the compensation to class
representatives are appropriate and consistent with other
awards in similar ERISA matters. The Court will therefore
grant the motion.
detailed procedural history and description of the settlement
agreement is set forth in a separate opinion granting final
approval to the settlement, issued concomitantly with this
Order. In sum, the parties have agreed to settle the
plaintiffs' class action ERISA claims in two related
matters, Clark v. Duke University, No. 1:16-CV-01044
and Lucas v. Duke University, No. 1:18-CV-00722.
Plaintiffs' claims in both matters are based on alleged
unreasonable recordkeeping expenses, breaches of duty of
prudence, and prohibited transactions arising out of the
defendants' management of the Duke University Faculty
& Staff Retirement Plan. See Doc.
Complaint, Lucas, No. 1:18-CV-00722, Doc. 1 (M.D.
N.C. Aug. 20, 2018). The proposed settlement provides for a
$10.65 million gross settlement fund as well as other
non-monetary relief in exchange for, inter alia, a
release of ERISA-related claims on behalf of over 58, 000
class members. Doc. 149-2. The settlement also allows for an
award of up to $3.55 million, or one-third of the common
fund, in attorney's fees, $825, 000 in attorney's
expenses, and case contribution awards of up to $25, 000 for
named plaintiffs in Clark and $30, 000 for named
plaintiffs in both Clark and Lucas, who are
also appointed class representatives for their respective
classes. See Id. at pp. 2-3 ¶¶ 2.3, 2.13.
with these provisions, Class Counsel requests $3, 550, 000 in
attorney's fees, reimbursement of $822, 212 in
litigation-advanced expenses, and case contribution awards of
$25, 000 each for Clark named plaintiffs David Clark
and Thomas C. Mehen, and $30, 000 each for
Clark/Lucas named plaintiffs Kathi Lucas, Jorge
Lopez, and Keith A. Feather. Doc. 159 at 1. At the fairness
hearing, Class Counsel confirmed that these payments in
addition to administrative costs will result in a net
settlement amount of approximately $5.97 million for
distribution to class members.
Court ordered the appointed Settlement Administrator,
Analytics, to notify class members of the settlement and that
Class Counsel would seek compensation from the settlement
fund for the class representatives, attorney's fees, and
costs. See Doc. 158 at 13-16. The Court also
permitted any class member to file objections with the Court
no later than thirty calendar days before the fairness
hearing scheduled for June 18, 2019. See Id. at 6,
16-17. The project manager at Analytics affirms that notice
was mailed or emailed to all 58, 594 class members and
published on a settlement website, with only a relatively
small number returned undeliverable. Doc. 163-3 at
¶¶ 5-6, 8. This notice included information about
the request for attorney's fees and how class members
could object. See Id. at 17, 20.
motion for attorney's fees has been on the docket since
April 19, 2019. Doc. 159. No. class member filed objections
to the settlement or proposed attorney's fees, expenses,
or class representative awards. The defendants have not
opposed the motion.
class action, a court may award reasonable attorney's
fees and nontaxable costs as authorized by law or by the
parties' 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 Sims v.
BB&T Corp., No. 15CV732, 2019 WL 1993519, at *1
(M.D. N.C. May 6, 2019); 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. May 2019); id. at n.483, n.484 (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) attorney's 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)).
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). A reasonable rate is usually calculated by
looking at the local market, see Burrs v. United Techs.
Corp, No. 1:18CV491, 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 $3, 550, 000, 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 7, 841.60 attorney hours and 661.30 hours
of non-attorney time in this matter, a significant investment
of labor and resources. See Doc. 160-2 at ¶ 3;
Doc. 160-3 at ¶ 7. ERISA litigation is a “rapidly
evolving and demanding area of the law, ” In re
Wachovia Corp ERISA Litig., No. 3:09cv262, 2011 WL
5037183, at *4 (W.D. N.C. Oct. 24, 2011), and excessive fee
403(b) cases are particularly novel as the first trial for
this type of matter was just last year. See Doc.
160-1 at ¶ 20 (describing Sacerdote v. New York
Univ., 328 F.Supp.3d 273 (S.D.N.Y. 2018)). That trial
resulted in a judgment against the plaintiffs.
Sacerdote, 328 F.Supp.3d at 273. This, along with
several dismissals or summary judgment rulings against
plaintiffs in similar matters,  tends to show that these cases
require a high level of skill on behalf of plaintiffs to
achieve any recovery. See ...