The opinion of the court was delivered by: Judge Robert W. Gettleman
THIS DOCUMENT RELATES TO: ALL CASE
MEMORANDUM OPINION AND ORDER
After approximately eight years of litigation, this complicated multi-district case was settled in September 2008, resulting in a benefit to a national class consisting of all persons who were damaged by defendants' improper disclosure of their financial information, in violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. In addition to the $75 million dollar cash fund deposited by defendant Trans Union, the settlement provides for in-kind services for which claims valued at over $34 million have been made. In addition, Trans Union continues to be subject to individual lawsuits by affected consumers. There is no doubt that the settlement resulted in substantial benefits for the plaintiff class.
MDL co-lead counsel, liaison counsel, Frey counsel and Louisiana counsel (collectively "Movants"),*fn1 along with Texas counsel,*fn2 have moved for an award of attorneys' fees. Movants have requested a total award of $15.1 million in fees, to be divided pursuant to an undisclosed agreement among them, along with expenses in the amount of $774,664.41. Texas counsel have requested a total fee award of $2,850,000.00, representing a multiplier of 1.77 times a lodestar of $1,613,578.75. Movants and Texas counsel have submitted extensive, yet flawed, documentation and declarations to support their requests for these fees, and urge the court to view the requests either as a percentage of the recovery or under a lodestar basis. A class member, David T. Murray, has filed an objection, contending that a fee award of no more that 10% of the monetary recovery ($75 million) should be awarded. For the reasons discussed below, the court denies both motions and has determined that an award of fees totaling 10% of the benefit to the class is appropriate in this case.
Because the settlement creates a settlement fund in exchange for release of defendants' liability for damages and statutory attorneys' fees, equitable fund principles govern the court's award of fees. See Florian v. Nationsbank of Georgia, N.A., 34 F.3d 560, 563-564(7th Cir. 1994). Under equitable principles, this court has discretion to use either the lodestar method or a percentage of recovery method to determine an appropriate award.
Under the lodestar approach, a "lodestar" figure is calculated by multiplying the number of hours expended by each individual attorney's hourly rate. Under the percentage approach, a flat percentage of the settlement fund is awarded as fees. Id. Under either approach, the court's task is to do its "best to award counsel the market price for legal services, in light of the risk of nonpayment and the normal rate of compensation in the market" at the outset of the litigation when the risk of loss still existed. Sutton .v Bernard, 504 F.3d 688, 692 (7th Cir. 2007) (citing In re Synthroid Mktg. Litig., 264 F.3d 712, 718 (7th Cir. 2001)).
Movants' and Texas counsel's requests for fees are unsupportable under either approach. To begin, contrary to Movants' and Texas counsel's arguments, due to the underlying successful action by the FTC against Trans Union,*fn3 there was very little chance that this litigation would not be successful at some level. The greatest risk posed to plaintiffs' counsel involved structuring the class certification and computing damages. Although, as counsel point out, the court initially denied a national class in this case, there was little question that smaller classes could be certified and administered either in the context of this MDL case or individual state-based litigation. See In re Trans Union Corp. Privacy Litig., 211 F.R.D. 328 (N.D. Ill. 2002); In re Trans Union Corp Privacy Litig., 326 F. Supp. 2d 893 (N.D. Ill. 2004). Therefore, given the fee-shifting provision in the FCRA, there was little risk that plaintiffs' attorneys would not be compensated.
Typically, this court employs the lodestar approach to awards of attorneys' fees, even in common fund cases. In the instant case, however, the court finds that the materials submitted to support the fee petitions are materially inadequate and troubling. Most, but not all of the problems arise from the documentation submitted by Louisiana counsel, Dawn Wheelahan. The following is a summary of some of the most troubling aspects of the fee petition and supporting documents:
Questionable Value Added by Secondary MDL Counsel: Twenty-eight law firms submitted requests for fees related to work done on behalf of the MDL plaintiffs. Four of these law firms routinely appeared and filed pleadings before the District Court (the "Primary MDL Counsel"). The remaining twenty-four firms did not (the "Secondary MDL Counsel"). The majority of Secondary MDL Counsel are solo practitioners or small law firms that specialize in class action work.With two exceptions, the Secondary MDL Counsel did not submit time sheets or detailed billing records for the court's review. Rather, they provided declarations describing their class action expertise, firm resumes, and charts summarizing the hours spent in connection with this litigation. The charts do not include a date range. The declarations state the month in which the attorney(s) began working "on behalf of the plaintiffs" - generally sometime between March and September 2000. The chart divides the attorney(s)' time into seven broad categories: (1) investigations, factual research; (2) discovery; (3) pleadings, briefs and pretrial motions; (4) court appearances; (5) settlements; (6) litigation strategy, analysis and case management; and (7) class certification. The fees set forth in the charts submitted by Secondary MDL Counseltotal $5,221,214. Aside from the initial state court filings, the court cannot determine the value, if any, added by Secondary MDL Counsel. Moreover, due to the limitations of the supporting documentation, it is impossible to identify duplicative and unnecessary work.See Heriaud v. Ryder Transp. Servs., 2006 WL 681041, *3 (N.D. Ill. Mar. 14, 2006) (reasoning that the number of hours reasonably expended on the litigation does not include those "that are excessive, redundant, or otherwise unnecessary").
Duplicative Tasks: Louisiana and Texas counsel seek to recover fees for work related to the notice program. In late April 2008, the parties requested the assistance of Magistrate Judge Mason in resolving a dispute as to the necessary participants in communications with Hillsoft Notifications (the notice provider). It is clear from the parties' time records and the emails provided to Judge Mason that MDL, Louisiana, and Texas counsel engaged in duplicative communications with Hillsoft. Thus, many of the hours billed in connection with Hillsoft's notice program are redundant and/or excessive, and should be cut.
Lack of Detail: Louisiana counsel's time submissions include dozens, if not hundreds, of hours billed to "teleconf. co-counsel," "meet w/ counsel," or "email couns." without any further identification of the value added by these tasks. MDL and Liaison counsel did not provide the court with individual time sheets or daily time logs, but rather provided summary sheets breaking down each attorney's time, over the course of the entire case, into seven categories.
Travel Time: On at least thirty-two separate occasions, Louisiana counsel Wheelahan billed twelve hours for "travel time in Chicago" in addition to the time spent traveling to Chicago and/or working on case-related tasks in Chicago. For example, on November 27, 2005, counsel billed 7 hours to travel to Chicago and prepare for conference, 3.5 hours for a meeting, and 12 hours travel time in Chicago, for an astounding total of 23.5 hours that day. On October 4, 2006, counsel billed 6.5 hours travel to Chicago for a status conference, 12 hours travel time in Chicago, and 3 hours for drafting correspondence and preparing for a conference, for a total of 21.5 hours that day. On August 22, 2007, Wheelahan billed 25.5 hours (4.5 hours for emails, 3 hours for hearing preparation, 6 hours to travel to Chicago, and 12 hours "travel time" in Chicago). The court finds that this time is unacceptable, unsupportable and outrageously overstated.*fn4 Administrative Tasks: It is incumbent upon the district court to disallow hours expended by counsel on tasks that are easily delegable to non-professional assistants, such as administrative tasks. Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 553 (7th Cir. 1999). Louisiana counsel routinely billed between .4 and .8 hours time towards making travel arrangements (8/22/05, 10/19/05, 12/10/05, 12/21/05, 3/7/06, 8/21/06, 11/17/06, 12/29/06, 2/22/07, 7/3/07, 7/25/07, 8/4/07, 8/27/07, 9/12/07, 12/7/07, 1/5/07, 1/15/08, 3/19/08, 4/19/08, 5/20/08, 10/15/08 and 11/1/08). Louisiana counsel also seeks fees for time spent reviewing and archiving email correspondence (4/27/06, 5/6/06, 5/12/06, 5/17/07, 9/7/07, 2/26/08 and 6/9/08) and for downloading, filing, mailing and organizing documents (8/27/08, 9/5/07, 9/10/07, 9/29/07, 10/2/07, 10/25/07, 11/12/07, 1/5/08, 1/10-12/08, 1/21/08, 1/26/08, 2/14/08, 4/13/08, and 6/25/08). The number of hours, if any, that MDL counsel claims for clerical tasks cannot be determined. Texas Counsel did not include administrative tasks in their fee request.
Time Spent Working on Fee Submissions/ Fee Issues: Liaison counsel excludes time spent on preparing the fee submission and working on fee issues. See In re Abbott Labs Omniflox Prod. Liab. Litig., 1997 U.S. Dist. LEXIS 3679 at *14 n.8 (N.D. Ill. Mar. 6, 1997). There is no indication that MDL, Louisiana or Texas counsel did the same. Unrelated Tasks (other cases and/or practice related): Louisiana counsel Wheelahan seeks fees for various tasks related to her decision to "attend FCRA Safeco arg in S.Ct." on 1/2/05 and "S.Ct. argu on willfulness standard" on 11/15/06. This includes ...