that a blended method may be best. In any event, while the percentage method has been used and approved, counsel point to no controlling precedent that the percentage method must be used.
There are two principal arguments for applying the percentage method. One is that it is simpler and less time-consuming than the lodestar approach and therefore saves the court work and time.
See Activision, 723 F. Supp. at 1375. This court, however, has applied the lodestar in numerous cases and has not been overburdened by the task. Moreover, the attorney's fee issue can involve substantial sums of money and there is no reason why the $ 3,000,000 claim for attorney's fees in this case is any less deserving of the court's time and attention than a $ 3,000,000 claim for damages. Also, even if it is true that the fee award often ends up being between 20% and 30% when the lodestar is applied (a proposition that is not true of the present case), that difference can still be substantial. In this case, the difference between 20% and 30% would be $ 990,000, not a paltry sum. As shown by the present case, the lodestar can still produce a significant variance from the percentage method.
The second argument is that using the lodestar is an incentive to the attorneys to run up the hours while applying the percentage method is an incentive to achieve the greatest award in the least amount of time. See Activision, 723 F. Supp. at 1376. However, by awarding attorneys the same percentage regardless of the time devoted to the case, there is no savings in attorney's fees for the class. Thus, in the present case for example, the attorneys argued that one reason settlement was appropriate was that the greater amount of damages that might be won at trial could be eaten up by further attorney's fees. But if the attorneys would still get 30%, not a lodestar, the greater damages potentially won at trial would not have been achieved at an expense that made additional damages worthless. The class would still receive 70% of the additional damages. A percentage award provides incentive to the attorneys to settle relatively cheaply early in the litigation since it can provide them with a larger hourly fee and then free them up to pursue more cases that they can also settle early in the litigation for less than the best value for the class. Under the lodestar method, requiring fees to be reasonable and awarding multipliers in some cases is the incentive for attorneys to be efficient.
The lodestar and percentage methods each have advantages and disadvantages. There is no clear advantage to using the percentage method. This court will continue to use the lodestar/multiplier method until controlling precedent directs otherwise. See Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989); Purdy, 727 F. Supp. at 1269.
If the percentage method were used, it would probably result in a higher award than the lodestar method, but still less than the 30% requested by counsel. Awards under the percentage approach are generally in the 20% to 30% range. Mashburn, 684 F. Supp. at 692. As already indicated by the reasons for denying a multiplier, this case does not involve any circumstances justifying an award on the high end of the range. Instead, the award should be on the low end of the range. An award below 20% may even be justified under the percentage approach, but that question will not be resolved since the award in this case will be based on the lodestar approach.
An attorney's fee award of $ 950,000 adequately compensates the attorneys for the work they performed. This was not a particularly risky case to assume and that amount provides a substantial rate for the reasonable hours put into this case. In addition to the $ 950,000, counsel should receive the interest earned on that portion of the settlement fund subsequent to the December 22, 1989 entry of judgment in this case.
Still remaining is the question of expenses. Counsel request $ 131,900 for expenses. Again, no categorized totals were provided by counsel. The court has totaled the expenses and the major items include $ 43,037 for an assessment fund used for printing and mailing; $ 18,917 for travel and transportation; $ 17,867 for photocopying; $ 15,752 for experts; $ 10,623 for computer research; $ 8,051 for telephone and fax expenses; and $ 6,559 for mail and delivery expenses. The expenses may include unnecessary travel, telephone, mail, and photocopying expenses resulting from the unnecessary number of attorneys involved in this case. The expense total, however, does not appear unreasonable. The expenses will be allowed except for computer research, which is part of the amount allowed for attorney's fees. An award of $ 121,277 will be allowed.
IT IS THEREFORE ORDERED that the joint petition of class and derivative counsel for an award of attorney's fees and reimbursement of expenses is granted in part and denied in part. The Clerk of the Court is directed to enter judgment awarding plaintiffs' counsel $ 1,071,277 representing $ 950,000 attorney's fees and $ 121,277 expenses payable out of the class settlement fund, plus interest accrued from December 22, 1989 to the date of disbursement from the settlement fund escrow account.
Dated: FEBRUARY 27, 1990