In Re: Citigroup Inc. Securities Litigation, 1:07-cv-09901

This securities class action settled for $590 million; after distributions, $374,820 (later $405,000) remained and Lead Counsel proposed donating it cy pres to three charities.
Objector Theodore Frank sought reconsideration, arguing cy pres recipients must closely approximate class interests and proposing an SEC Fair Fund or organizations serving shareholder interests.
The Court initially approved the three cy pres recipients, granted reconsideration but reaffirmed the cy pres decision, and Frank appealed; distribution of the residual funds was stayed.
While the appeal was pending, Lead Counsel discovered that a separate $75 million Citigroup SEC Fair Fund (from an SEC action) had not yet been distributed and that its forthcoming distribution would reach class members; combining that fund with the $405,000 made a direct class distribution feasible.
Lead Counsel moved under Rule 60(b) to vacate the cy pres designation; the Court granted the motion and ordered distribution to class members via the Citigroup SEC Fair Fund.
Frank moved for attorneys’ fees and expenses, claiming his objection substantially caused the additional distribution to class members; Lead Counsel did not contest the fee calculation but disputed causation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an objector who prompts a change in distribution can recover attorneys’ fees from the fund	Frank: his objection led to distribution to class via SEC Fair Fund, so he substantially caused a benefit and is entitled to fees	Lead Counsel: Frank sought a different SEC Fair Fund; any SEC-Fund argument would have been another cy pres designation, so no added benefit; causal link is coincidental	Court: Frank was a substantial cause of the benefit because his argument prompted Lead Counsel’s investigation that revealed the available Citigroup SEC Fair Fund; fees awarded
Standard for awarding objector fees from a common fund	Frank: objectors who improve a settlement may recover fees under common-fund doctrine and Second Circuit precedent	Lead Counsel: does not dispute the doctrine but contests application here (causation)	Court: applies common-fund doctrine and Second Circuit authority; requires that objector’s actions be a substantial cause, which was met
Amount and reasonableness of requested fees and expenses	Frank: requests $33,412.50 (8.25% of $405,000), including $2,443 expenses; submitted lodestar and percentage support	Lead Counsel: did not contest hours, rates, or amount	Held: Court found the requested $33,412.50 reasonable and granted it, deducting it from the remaining fund

White v. Auerbach, 500 F.2d 822 (2d Cir. 1974) (objectors who improve settlements may receive fee awards and trial court has broad discretion)
In re Holocaust Victim Assets Litig., 424 F.3d 150 (2d Cir. 2005) (common-fund doctrine and requirement that requester’s actions be a substantial cause of benefit)
Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000) (standards for reasonableness of attorneys’ fees; percentage and lodestar cross-check)
In re Citigroup, Inc. Sec. Litig., 965 F. Supp. 2d 369 (S.D.N.Y. 2013) (court approved the class settlement)
In re Citigroup, Inc. Sec. Litig., 199 F. Supp. 3d 845 (S.D.N.Y. 2016) (reconsideration decision applying the "reasonable approximation" standard for cy pres)