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Martin v. Foster Wheeler Energy Corp.

March 31, 2008

SARAH MARTIN AND JEFFREY S. MARTIN, W/H, AND WILLIAM HEVERLY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
FOSTER WHEELER ENERGY CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is Plaintiffs' motion for attorneys' fees and costs for Class Counsel.(Doc. 55.)Also before the Court is a motion for attorneys' fees and costs by the Objector Plaintiffs to the Settlement. (Doc. 63.) For the reasons set forth below, the Court will grantin part and deny in part Plaintiffs' motion for Class Counsel's fees and costs. Class Counsel for Plaintiffs will receive thirty percent (30%) of the Settlement fund, or $480,000.00 in attorneys' fees, and $6,116.81 in costs. The Court will grant Plaintiffs' request for an award to the Class Representatives. Sarah Martin will receive $4,000.00, Jeffrey S. Martin will receive $4,000.00, and William Heverly will receive $2,000.00 as an incentive award from the Fund. (Doc. 55.) Likewise, the Court will deny the Objector Plaintiffs' motion, as the Objector Plaintiffs did not confer a substantial benefit on the class. (Doc. 63.)

BACKGROUND

The present motion requests attorneys' fees and costs for Plaintiffs' Class Counsel. The facts of the case were previously discussed in detail in this Court's Order of December 14, 2007. (Doc. 62.) Therefore, only the facts relevant to this motion will be discussed here. The Class Members sued based upon water problems they believed were traceable to amounts of trichloroethylene ("TCE") caused by Defendant in the Class Members' private wells. The parties conducted settlement negotiations which led to a Settlement presented to the Court on April 16, 2007 as a Joint Motion for Preliminary Approval of Class Action Settlement. (Doc. 41.) The Settlement included an agreement by Foster Wheeler to pay one million, six hundred dollars ($1.6 million) to the class for settling and releasing their claims. (Doc. 41.) The Settlement also included a forty-thousand dollar ($40,000) Alleged Water-Related Fund for purposes of funding solutions for Class Members with specific water related problems traceable to the abandonment of the Class Members' wells. (Doc. 41.) The Court approved this Joint Motion on April 19, 2007. (Doc. 43.) Objections to the Settlement were filed by a group of Objector Plaintiffs on July 23, 2007. (Doc. 49.) A Fairness Hearing was held on August 7, 2007. (Doc. 58.) The Settlement was approved by the Court on December 14, 2007. (Doc. 62.)

On July 31, 2007, Plaintiffs made this motion for attorneys' fees and costs for Class Counsel, requesting a fee of thirty-three and one-third percent (33 a%) of the Settlement Fund. (Doc. 55.) Class Counsel also requested a division of the ten-thousand dollar ($10,000) award to the Class Representatives. (Doc. 55.) The Objector Plaintiffs filed a motion for attorneys' fees and costs on December 20, 2007 in the amount of $36,510.47. (Doc. 63.) These motions are fully briefed and ripe for disposition.

DISCUSSION

I. Motion for Attorneys' Fees by Plaintiffs for Class Counsel

"There are two basic methods for calculating attorneys' fees - the percentage-of-recovery method and the lodestar method." In re Prudential Ins. America Sales Practice Litig. Agent Actions, 148 F.3d 283, 333 (3d Cir. 1998). The percentage-of-recovery method is generally used in cases involving a common fund, and allows courts to award attorneys' fees from the fund based upon a percentage of the plaintiffs' recovery. Id. (citing In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 55 F.3d 768, 821 (3d Cir. 1995)). In contrast, the lodestar method is more often used in statutory fee-shifting cases. Id.(citing In re General Motors, 55 F.3d at 821.) The lodestar method may also be used when "the nature of the recovery does not allow the determination of the settlement's value necessary for application of the percentage-of-recovery method." Id. Although each method is generally applied to certain types of cases, it is recommended that courts use a second method of fee calculation to cross-check the fee calculation. Id.

In this case, the percentage-of-recovery method is the appropriate vehicle for calculating attorneys' fees in light of the common settlement fund. Id. at 333-34; Gunter v. Ridgewood Energy Corp., 223 F.3d 190, 195 n. 1 (3d Cir.2000); Brytus v. Spang & Co., 203 F.3d 238, 243 (3d Cir.2000); In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 55 F.3d 768, 821 (3d Cir.1995).

A. Percentage-of-Recovery

In determining the appropriateness of the fee award in a common fund class action, the Court, in determining the percentage-of-recovery, should consider a list of non-exclusive factors: (1) the size of the fund created and the number of persons benefitted; (2) the presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel; (3) the skill and efficiency of the attorneys involved; (4) the complexity and duration of the litigation; (5) the risk of nonpayment; (6) the amount of time devoted to the case by plaintiffs' counsel; and (7) the awards in similar cases. Gunter v. Ridgewood Energy Corp., 223 F.3d 190, 195 n. 1 (3d Cir. 2000) (citing In re Prudential, 148 F.3d at 336-40). "These factors need not be applied in any formulaic way. Since each case is unique, certain factors may outweigh others." In re Rent-Way Sec. Litig., 305 F. Supp. 2d 491, 513 (W.D. Pa. 2003). The Court will consider each of these factors in turn.

1. Size of the Fund and Number of Persons Benefitted

The size of the Settlement Fund in this case is one-million, six-hundred and forty thousand dollars ($1.64 million). However, Class Counsel does not seek a fee from the forty-thousand dollar ($40,000.00) Alleged Water-Related Fund. Generally, the larger the size of the settlement fund, the smaller the percentage-of-recovery award is for class counsel. In re Prudential Ins., 148 F.3d at 339. In this case, the size of the class and the fund is not particularly large, and therefore there is little danger for an inflated fee based upon a very large class or recovery. See Erie County Retirees Ass'n v. County of Erie, Pennsylvania, 192 F. Supp. 2d 369, 379 (W.D. Pa. 2002).

As noted in Erie, as the size of the settlement fund decreases, so does the size of each class member's recovery. In this case, Category 1 members would receive approximately four percent (4%) of their assessed property value, an average of $4,800 per parcel, and an additional $20,200 per designated parcel for damages other than diminution in property value. Category 2 members would receive approximately four percent (4%) of their assessed property value, an average of $4,800 per parcel. Category 3 members would receive approximately two percent (2%) of their assessed property value, an average of $3,000 per parcel.

Here, a recovery of attorneys' fees of thirty-three and one third percent (33 a%) would greatly decrease the recovery of the Class Members. Such a recovery would grant the Class Counsel over one half-million dollars in fees. Such a recovery would be inordinately large, given the recovery of the class and the early settlement of this case.

Overall, this factor weighs heavily against Class Counsel's petition for an attorneys' fee of thirty-three and one-third percent (33 a%), as the recovery would be unduly large given the size of the Fund.

2. Substantial Objections

The Court previously addressed the reaction of the Class to the settlement in its December 14, 2007 Order. (Doc. 62.) At that time, it was noted that out of the approximately one-hundred and forty-seven (147) parcels that fall within the affected area, twenty (20) have indicated that they wish to be excluded from the Settlement. (Doc. 62.) Therefore, approximately 85% has opted in to the settlement, or otherwise expressed no issues with the settlement. Of the 85% of the settlement class, four (4) class members objected to the property valuation, and the other objectors were opposed to the settlement based on a variety of other reasons. (Doc. 62.)

The Court-appointed Class Administrator, A.B. Data, Ltd. mailed Notices to class members. (Verkhovskaya Aff. ¶¶8-12, Doc. 61 Ex. B.) A.B. Data also provided website and telephone services to respond to Class Member Inquriies. (Verkhovskaya Aff. ¶¶13-16, Doc. 61 Ex. B.)The Notices advised class members that Class Counsel would seek attorneys' fees of forty percent (40%) and reimbursement for costs, as well as an award for the Class Representatives. (Doc. 61 Ex. C.) There have been no objections on the basis of this notice.

At the Fairness Hearing, Mr. David A. Garrison, Esq., on behalf of the Objecting Plaintiffs, stated that the Objecting Plaintiffs objected to the fee petition filed by Class Counsel. (Fairness Hr'g Tr. 255-57, Aug. 7, 2007, Doc. 71.) However, the Court specifically told the Objecting Plaintiffs that "I'll hear you making an objection. I'm not going to count this as an objection unless you file a paper because there's - that triggers a briefing requirement under the local rules." (Fairness Hr'g Tr. 257, Aug. 7, 2007, Doc. 71.) Mr. Garrison stated that he was authorized to object to the fee petition at the Fairness Hearing. (Fairness Hr'g Tr. 257, Aug. 7, 2007, Doc. 71.) The Court responded that "[A]uthorized to object to it but maybe not file a brief is going to fail for the lack of a brief. So, file it. If you're going to file objections to the fee petition, they must be in writing, the objections, and you must follow the local rules as far as the briefing schedule. Let me make that clear." (Fairness Hr'g Tr. 257, Aug. 7, 2007, Doc. 71.) The Court noted a third time that "[I]t's of no consequence until you file a document, objection and then file a brief." (Fairness Hr'g Tr. 257, Aug. 7, 2007, Doc. 71.) The Court was abundantly clear that to file objections to the fee petition, the Objector Plaintiffs would be required to file a brief. However, no objections or brief were filed by the Objector Plaintiffs, so the Court notes that they no longer object to the fee petition.

As there have been no substantial objections to the attorneys' fees by Class Counsel, this factor weighs in favor of granting Class ...


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