United States District Court, S.D. Indiana, Indianapolis Division
MARY BELL, JANICE GRIDER, CINDY PROKISH, JOHN HOFFMAN, and PAMELA LEINONEN, Plaintiffs,
PENSION COMMITTEE OF ATH HOLDING COMPANY, LLC, ATH HOLDING COMPANY, LLC, BOARD OF DIRECTORS OF ATH HOLDING COMPANY, LLC, Defendants.
ORDER APPROVING FEES, COSTS AND AWARDS
WALTON PRATT, JUDGE.
before the Court is Plaintiffs' Motion for Attorneys'
Fees, Reimbursement of Expenses and Case Contribution Awards
for Named Plaintiffs. (Filing No. 371.) In their
Motion, Class Counsel requests that the Court approve a fee
for obtaining a settlement of class claims under the Employee
Retirement Income Security Act ("ERISA"). The
settlement provides a $23, 650, 000.00 monetary recovery for
the benefit of Class Members. Taking into account the
significant and powerful non-monetary relief and benefit of
tax deferral, the total benefit to the Class exceeds $62
Counsel has asked this Court to approve a fee award of $7,
882, 545 which constitutes one-third of the monetary award.
Additional improvements to the Plan as a result of the
litigation and settlement bring the actual value to the Class
far higher to a total value of over $62 million dollars.
Class Counsel has also asked this Court to award it $513,
015.32 for expenses. Additionally, Class Counsel has
requested this Court approve incentive awards to the Class
Representatives and also to the Individual Named Plaintiffs.
For the reasons set forth below, Class Counsel's Motion
to the Settlement Agreement and this Court's Preliminary
Approval Order, Class Counsel directed the mailing of
individual notices to the Class and created a Class website
to provide information to the Class. Individual notices were
mailed to over 127, 000 Class Members and, with an objection
deadline of August 5, 2019, only one Class Member filed a
timely objection. Filing No. 377 at 6. This Court finds that only
one objection compared to a total class of over 127, 000 is a
remarkable sign of the Class's overwhelming support for
this Settlement and Class Counsel's request. As noted in
this Court's final approval order and for the reasons
stated therein, the lone objection to this Settlement is
over a decade, Class Counsel, in pioneering a new area of the
law, have continuously demonstrated an unwavering and zealous
commitment to represent American employees and retirees
seeking to recover losses incurred due to alleged retirement
plan mismanagement. Jerome Schlichter and Schlichter Bogard
& Denton actually created the field of 401(k) excessive
fee litigation which did not exist before. Filing No.
372-1 ¶13-15. Before Jerome Schlichter and the firm
of Schlichter Bogard & Denton filed a series of cases in
2006 regarding excessive fees in 401(k) plans, there had
never been a case brought for excessive fees in a 401(k) plan
by any lawyer in the United States. Id. Class
Counsel is firmly established as the "pioneer and the
leader in the field of retirement Plan litigation."
Abbott v. Lockheed Martin Corp., No. 06-701, 2015
U.S. Dist. LEXIS 93206, at *8 (S.D. Ill. July 17, 2015)
Counsel are "experts in ERISA litigation" with
extraordinary skill and determination required to litigate
these complex cases. Krueger v. Ameriprise Fin.,
Inc., No. 11-2781, 2015 U.S. Dist. LEXIS 91385, at *6
(D. Minn. July 13, 2015). This Court notes that no 401(k)
excessive fee cases had been filed before Class Counsel
pioneered them, and agrees with other courts that the work of
Jerome Schlichter and Schlichter Bogard & Denton
"illustrates an exceptional example of a private
attorney general risking large sums of money and investing
thousands of hours for the benefit of employees and
retirees." Will v. General Dynamics Corp., No.
06-698, 2010 U.S. Dist. LEXIS 123349, at *8 (S.D. Ill. Nov.
22, 2010) (J. Murphy).
FINDINGS AND CONCLUSIONS
the "common-fund" doctrine, class counsel is
entitled to a reasonable fee drawn from the commonly held
fund created by a settlement for the benefit of the class.
See, e.g., Boeing Co. v. VanGemert, 444 U.S. 472,
478 (1980). Additionally, the United States Court of Appeals
for the Seventh Circuit has found that attorneys' fees
based on the common fund doctrine are appropriate in ERISA
cases. See Florin v. Nationsbank, 34 F.3d 560, 563
(7th Cir. 1994). A court must also consider the overall
benefit to the class, including non-monetary benefits, when
evaluating the fee request. Spano v. Boeing Co., No.
06-743, 2016 U.S. Dist. LEXIS 161078, at *5 (S.D. Ill. Mar.
31, 2016) (J. Rosenstengel) (citing Manual for Complex
Litigation, Fourth, § 21.71, at 337 (2004)). An
assessment of the non-monetary benefits and relief obtained
as part of a settlement is important so as to encourage
attorneys to obtain future meaningful relief. As set forth
below and as demonstrated through expert testimony offered
via declaration, Class Counsel's efforts to secure
additional relief beyond the monetary amount added
significant value to the Settlement and ultimately to Class
determining whether to grant a requested fee in a class
action settlement, the Seventh Circuit Court of Appeals
requires an analysis of whether the requested fee is within
the range of fees that would have been agreed to at the
outset of the litigation in an arms-length negotiation given
the risk of nonpayment and the normal rate of compensation in
the market at the time. See In re Synthroid Marketing
Litig., 264 F.3d 712, 718 (7th Cir. 2001). In common
fund cases, "the measure of what is reasonable [as an
attorney fee] is what an attorney would receive from a paying
client in a similar case" Montgomery v. Aetna
Plywood, Inc., 231 F.3d 399, 408 (7th Cir. 2000).
"[I]t is not the function of judges in fee litigation to
determine the equivalent of the medieval just price. It is to
determine what the lawyer would receive if he were selling
his services in the market rather than being paid by court
order." Matter of Cont'l Ill. Sec. Litig.,
962 F.2d 566, 568 (7th Cir. 1992). This requires the district
judge to "ascertain the appropriate rate for cases of
similar difficulty and risk, and of similarly limited
potential recovery." Kirchoff v. Flynn, 786
F.2d 320, 326 (7th Cir. 1986).
common fund class action settlement, the Seventh Circuit
Court of Appeals uses a percentage of the relief obtained
rather than a lodestar or other basis. See Gaskill v.
Gordon, 160 F.3d 361, 363 (7th Cir. 1998); see also
Florin, 34 F.3d at 566 (but leaving to the discretion of
the district court the determination as to which method is
the most efficient and suitable in a given case). "A
one-third fee [percentage] is consistent with the market rate
in settlements concerning this particularly complex area of
law." Spano, 2016 U.S. Dist. LEXIS 161078, at
*7 (quoting Abbott, 2015 U.S. Dist. LEXIS 93206, at
*7); Beesley v. Int'l Paper Co., No. 06-703,
2014 U.S. Dist. LEXIS 12037, at *10 (S.D. Ill. Jan 31, 2014)
(J. Herndon); Will, 2010 U.S. Dist. LEXIS 123349, at
*9 (finding that in ERISA 401(k) fee litigation, "a
one-third fee is consistent with the market rate"). In
this case, Class Counsel's fee request totaling 33 1/3%
of the monetary recovery, and a much smaller percentage when
including non-monetary relief (as it must be), is reasonable
and consistent with the awards in many other cases also
brought by Class Counsel, including those in this Circuit.
Sims v. BB&T, No. 15-732, Filing No.
450 (M.D. N.C. May 6, 2019)
Ramsey v. Philips N.A., No. 18-1099,
Filing No. 27 (S.D.Ill. Oct. 15, 2018)
In re Northrop Grumman Corp. ERISA Litig.,
No. 06-6213, 2017 WL 9614818 (C.D.Cal. Oct. 24,
Gordan v. Mass. Mut. Life Ins. Co., No.
13-30184, 2016 WL 11272044 (D.Mass. Nov. 3, 2016)
Kruger v. Novant Health, Inc., No. 14-208,
2016 WL 6769066, 1-2 (M.D. N.C. Sept. 29, 2016)
Spano v. Boeing Co., No. 06-743, 2016 WL
3791123 (S.D.Ill. Mar. 31, 2016)
Abbott v Lockheed Martin Corp., No.
06-701, 2015 WL 4398475 (S.D.Ill. July 17, 2015)
Krueger v. Ameriprise Fin., Inc., No.
11-2781, 2015 WL 4246879 (D.Minn. July 13, 2015)
Beesley v. Int'l Paper Co., No.
06-703, 2014 WL 375432 (S.D.Ill. Jan. 31, 2014)
Nolte v. Cigna Corp., No. 07-2046, 2013 WL
12242015 (C.D.Ill. Oct. 15, 2013)
George v. Kraft Foods Global, Inc., Nos.
08-3899, 07-1713, 2012 WL 13089487 (N.D.Ill. June
Will v. Gen. Dynamics Corp., No. 06-698,
2010 WL 4818174 (S.D.Ill. Nov. 22, 2010)
Martin v. Caterpillar Inc., No. 07-1009,
2010 WL 11614985 (C.D.Ill. Sept. 10, 2010)
Counsel's fee request is wholly appropriate given the
extraordinary risk Class Counsel accepted in agreeing to
represent the Class; the fact that Class Counsel brought this
kind of case when no one else had; Class Counsel's
demonstrated willingness to devote tremendous resources for
many years to the case as it has done in other cases; the
substantial monetary recovery; and the additional value of
the future relief included in this settlement to Plan
882, 545 fee would be justified without considering
non-monetary relief and other benefits to the Class. However,
as it must, the Court finds that the non-monetary benefits
are real and significant improvements to the Plan that must
be considered. The Court finds that the ...