Memo from Greenberg to All Staff Re: 2 Courts Set Standards for Counsel-Fee Awards Article

     [||97b696cc-9ef9-473b-8f5a-b28a5485f0c1||] TO: 

  

FYl 

  

Memo fog 

ALL STAFF ATTORNEYS 

Jack Greenberg 

  

  

i 

  

ok Basie Figures Doubled to Include ‘Intangibles’ 
     

  

2 Courts Set Standards 

For Counsel- Fee Awards 
  

   
  
   

   ! Within the past two months, 

suger in two federal courts 

‘| have arrived at the same method 

| of evaluating the intangible 

factors .to be considered in an 

award of counsel fecs—they 

| doubled the basic Bure they 

had arrived at. a” 

| 3 The standards for awarding 

counsel fees were detailed by the 

Third U. 8. Circuit Court of 

Appeals in Lindy Bros. Builders 

7 vo American Radiator and Sanie 

w tary, Corp. (487 F, 2d 161, 1963) 
ahd®the’ Second * Uix'S:a Circuit 
Court of Appeals; in' City of De- 

troit Vv, Grithmmell Corp.. (495 F. 

2d 488, 1974) Js; i 3 a, 

ak oo, First Step 

5 “tn? both | .rulings,: ‘the > courts 

: said that the first step in‘award- 

ing counsel fees, was ‘to: de- 
tefmine * the, number ; of hours 
worked, on what aspects of the 

litigation: and by: whom, ‘part- 

ners, assoCiates, paralegals, ete. 

Then, an, hourly amount was to 

be aMigned to, “each: person's 

work. 

SEIC is ,only afters this step’ is 

taken; ‘the. courts. held, that a 
judge 4 then’ mal / consider the 

intangible, factors, ‘such as risk 

“wf | of litigation, contingency nature 
“5 "lof the fee, complexity of the is- 

#l sues, defense counsel's opposi- 

{tion and prior government 

    

  

   

  

  

  

2-
¢   

‘action, ‘such‘as.a ‘suit ‘by the 
Sccurities and, Exchange Lowe 

mission. cv? 

In neither. Lindy Bros.- nor 

City of Detroit did the appellate 

courts state how these factors 

should be evaluated, other than 

to state they should play a con- 

sideration in a fee award. 

<7 Awards Doubled 

However,’ both Judge Edward 

Weinfeld, "of the: U.. 8. Dis- 

trict Court for. the! ‘Southern 

- 

Judge James'L. Latchum, of the 

U. S. District* Court for. the 

District" of Delaware, held that 

the intangible ’ factors should 

result in a doubling of the basic 
"Wy M fl 

2 » CR Bd oF award, M1 i ry, 

Neither Judge" ‘however ex- 

plained in; precise terms. why 

they. doubled the Basic , .award, 

although they discussed all the 

intangible faptons in rougly the 

same manner. !s:ii.«:.. 
In neither case ‘was | there a 

previous SEC suit and in both 

cases there were ‘complex is- 
sues, strong” opposition, ‘complex 

issues and plaintiffs’, counsel had 

accepted the‘ cases ‘on. 5 gon- 

tingency nature. SELES: i 

' Judge Weinfeld,” in* Blank wv. 
Talley Industries . (70-4144, 

N. Y. L. J., Jan. 15) did state,   Continued on page 6, column 8 

District: of New York, and Chief 

  

N.Y. LAW JOURNAL 

[March 13, 

   

        

    

    

1975] ; 

  

  

  

   
    

  

(Continued) . * "UF 

    

              
    

A 

however, that "compensation 

“cannot be determined, > 
        with 7 

mathematical certainty.” . r #-; [= 

Judge Latchum's’ award was 

contained in a twenty-four-page 

opinion in Gissen v. Colorado 
Interstate Corporation (73-4645, ! 
March - 7), . consolidated “class :::-. 
actions. _by ‘shareholders. = of . 
Colorado Interstate Corporation 
challenging its merger "into 

Coastal States Gas Corporation ™ 

in 1973 as a violation of federal 

securities laws, © with es 
He approved a $5 Sniliion set-’ 

tlement Feb. 28 that! will be : 
paid by Coastal States. He had % 
under consideration ‘a ‘request 
for a $1 million fee award from”: 
plaintiffs’ counsel: His first-step LA 
determination, based on hours 
worked and hourly rates of 
counsel, was $446,386, which he 
doubled: to $892,772 after con- 

      
        
    

      

         
     

      
       

      
    
    
    

    
      

     
       

       
      
     
     
       

     

      

  

    
      
      

  

  

    

     
      sidering the intangible factors. : 

"The award will be shared. by. 
eight”law’ firms’ or ‘lawyers in: 
various ‘parts “of “the” ¢ountry, . 
including Kreindler & Kreindler, 
of New York, special counsel. 
Local law firms appearing for °' 
various defendants included Shea : 
Gould Climenko Kramer. di 
Casey, .and Cahill ‘Gordon 8 4 
Reindel. 3 HALO yn [||97b696cc-9ef9-473b-8f5a-b28a5485f0c1||]