36 F. Supp. 3d 344
S.D.N.Y.2014Background
- Plaintiffs (former and current participants in the Colgate‑Palmolive Employees’ Retirement Income Plan) sued under ERISA alleging miscalculation of pension benefits; consolidated from three suits and litigated ~3 years before settlement negotiations extended another 3 years.
- The settlement provides approximately $45.9 million in additional benefits to 8,612 class members (avg. ~$5,330 each); certain "Residual Annuity" claims were excluded from the settlement.
- Class Counsel (experienced ERISA firms) reported 3,915 billable hours through March 9, 2014, yielding a lodestar of $2,200,927; they requested 25% of the fund ($11,475,000), i.e., a 5.2x lodestar multiplier.
- No objections to the settlement or fee request were filed; the Court previously granted preliminary approval and later approved the settlement as fair under Fed. R. Civ. P. 23(e).
- Plaintiffs sought reimbursement of $591,011.17 in costs (largely experts and mediation) and $5,000 incentive awards for each of six named plaintiffs.
- The Court applied the Second Circuit’s Goldberger framework, used the percentage‑of‑the‑fund method with a lodestar cross‑check, and concluded a 25% fee was reasonable.
Issues
| Issue | Plaintiff's Argument | Colgate's Argument | Held |
|---|---|---|---|
| Appropriate attorneys’ fee | 25% of $45.9M fund (industry/ERISA precedent supports ~25–28%) | (No objection filed; implicitly would favor lower fee) | Awarded 25% ($11,475,000) as reasonable baseline under Goldberger and empirical ERISA data |
| Lodestar cross‑check / multiplier | Lodestar ~$2.2M; multiplier ~5.2 justified by case complexity and ERISA expertise | (No objection) | Multiplier high but not unreasonable on cross‑check; did not reduce percentage award |
| Reimbursement of litigation costs | $591,011.17 (experts, mediation, other expenses) are reasonable common‑fund expenses | (No objection) | Costs awarded in full to be paid from the fund |
| Named‑plaintiff incentive awards | $5,000 each to compensate time and effort | (No objection) | Six named plaintiffs awarded $5,000 each (total $30,000) |
Key Cases Cited
- Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) (sets Goldberger factors for common‑fund fee analysis)
- Wal‑Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96 (2d Cir. 2005) (endorses percentage‑of‑the‑fund approach and warns against lodestar incentives)
- City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (discusses contingent‑risk rationale for upward fee adjustment)
- In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir. 2005) (lodestar cross‑check purpose and when to reconsider percentage awards)
- Chicago Truck Drivers, Helpers & Warehouse Workers Union Pension Fund v. CPC Logistics, Inc., 698 F.3d 346 (7th Cir. 2012) (notes ERISA’s specialized nature)
- McDaniel v. Cnty. of Schenectady, 595 F.3d 411 (2d Cir. 2010) (discusses incentives and interests of plaintiffs and defendants in class settlements)
- In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 991 F. Supp. 2d 437 (E.D.N.Y. 2014) (discusses sliding‑scale approach to percentage awards)
- In re Synthroid Mktg. Litig., 264 F.3d 712 (7th Cir. 2001) (remarks on graduated schedules to align incentives)
- In re Merrill Lynch & Co., Inc. Research Reports Sec. Litig., 246 F.R.D. 156 (S.D.N.Y. 2007) (supports reimbursement of reasonable common‑fund litigation expenses)
- Domberger v. Metro. Life Ins. Co., 203 F.R.D. 118 (S.D.N.Y. 2001) (discusses criteria for incentive/case‑contribution awards)