Dist. Ct. erred in denying class member’s objection to attorney fee award of 25 percent of class action’s $45 million settlement in instant security fraud case. While Dist. Ct. found that proposed 25 percent attorney fee for class counsel was reasonable based on contingent nature of litigation and successful result for class, remand was required for new determination of fee award, where, although class counsel was deserving of multi-million dollar fee, Dist. Ct: (1) did not consider existence of ex ante fee agreement between class counsel and third-party that concerned similar litigation, since said agreement could serve as useful guidepost for determining market rate with respect to instant lawsuit; (2) did not properly consider lower risk of nonpayment, where prior litigation concerning defendant on similar issues had resulted in substantial settlements; and (3) did not give sufficient weight to fact that instant settlement took place at early stage of case so as to warrant reduction in proposed fee.
Federal 7th Circuit Court
Civil Court
Attorney Fees