991 F. Supp. 2d 437
E.D.N.Y2014Background
- Antitrust class action against Visa, MasterCard, and banks for alleged fee/rule fixing; settlement approved as fund (~$7.25B pre-opt-out, ~$5.7B post-opt-out) plus injunctive relief on network rules; Approval Order reserved attorneys’ fees resolution; Class Counsel seeks ~$160M lodestar and $570M fee (around 10% of the net fund).
- Judge grants $544.8M in fees and $27,037,716.97 in expenses; incentive payments to Class Plaintiffs denied without prejudice to renewal.
- Case involves large, long-running litigation with significant risk, complexity, and substantial injunctive relief; fee requested after opt-out reductions.
- Fee awarded based on a graduated schedule rather than a flat percentage, with lodestar cross-check used as a supplementary validation.
- Incentive payments to class representatives would be denied pending more detailed documentation and justification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reasonableness of fee award under Goldberger factors | Class Counsel seeks ~10% of fund given risk/complexity | Not explicitly stated in the record | Meets Goldberger factors; grants fee with graduated schedule (9.56% of fund) rather than a flat rate. |
| Appropriateness of a graduated fee schedule | Graduated schedule aligns with case size and risk; prevents windfalls | Not explicitly stated | Adopts a graduated schedule; total fee 544.8M (9.56% of fund) using brackets. |
| Lodestar cross-check validity | Lodestar (~$160M) supports reasonable multiplier | Not explicitly stated | Multiplier ~3.41 deemed reasonable and comparable to prior large cases. |
| Reimbursement of expenses and incentive payments | Seeks ~$27M expenses; $1.8M incentives for nine plaintiffs | Not explicitly stated | Expenses approved; incentive payments denied without prejudice pending better documentation. |
Key Cases Cited
- Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir.2000) (six-factor test for attorney's fee awards in common fund cases)
- Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir.2005) (preference for percentage-of-fund approach; avoids gimlet-eyed review of hours)
- In re Nortel Networks Corp. Sec. Litig., 539 F.3d 129 (2d Cir.2008) (market-rate considerations; negotiated rates in complex cases)
- In re Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503 (E.D.N.Y.2003) (comparable megafund settlement with injunctive relief considerations)
- In re WorldCom, Inc. Sec. Litig., 388 F. Supp. 2d 319 (S.D.N.Y.2005) (large, complex securities case fee precedent with high lodestar)