MEMORANDUM
These are two related securities class actions. Plaintiffs, stockholders of U.S. Healthcare, Inc., claimed that defendants engaged in a scheme to defraud by withholding adverse information about the company, thereby maintaining the stock at an inflated price during the class period. With discovery completed and the trial date fast approaching, counsel advised the court that the parties had reached a proposed settlement. After notice and a hearing as required under Rule 28(e) of the Federal Rules of Civil Procedure, the court approved the settlement in the amount of $22,000,000. In doing so, the court took intо account the various factors set forth in
Girsh v. Jepson,
Plaintiffs’ counsel are entitled to a fee, as well as costs, to be paid from the common fund they have created for the shareholder class members.
General Motors,
There are two different means which have been approved for calculating counsel fees in common fund cases. One is the lodestar method and the other the percеntage of recovery method. Under the former, a court first determines how many hours were reasonably spent on the case by each attorney and in what manner.
Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp.,
The percentage of recovery method, now favored by the Court of Appeals for the Third Circuit in common fund eases, employs a differеnt approach.
See General Motors,
The Court of Appeals has instructed the district courts to play an active role in determining the amount of counsel fees to be awarded in this type of action. The court must protect the rights of the class members whose counsel, when seeking a fee, stand in a position adverse to their clients. A class member, unless he or she hires separate counsel (at a cost that will probably be significantly greater than his or her individual recovery), is clearly at a disadvantage in challenging any fee petition. Moreover, once a settlement has been reached, defendants’ counsel has no real incentive to object, and predictably did not do so here. A defendant at that point has no interest in how the pie is divided. The fee application therefore is subject to “thorough judicial review” in order to assure that no overreaching occurs and that counsel and class members alike are
*65
treated fairly.
General Motors,
As noted above, we approved a settlement of $22,000,000 in a separate hearing. We found it to be fair, adequate, and reasonable. We recognized then and recognize now that plaintiffs’ counsel faced formidable adversaries аnd would have had to confront a number of serious evidentiary hurdles if this case had gone to trial. A victory for the plaintiffs at the end of the day was by no means assured. The result plaintiffs’ counsel achieved was commendable. Nonetheless, we must balance any fee award against the interests of the class members, who after all, are the beneficiaries of this fund. The issue is one of fair and reasonable compensation to counsel, who took serious risks and created a sizable fund, while preventing a windfall detrimental to the class members.
We have decided that an award of 25% of the fund is proper. This means a fee of $5,500,000. The Court оf Appeals has noted that class action fee awards have ranged from 19% to 45%.
See General Motors,
The Court of Appeals has suggested that even when we use the percentage of recovery method to determine counsel fees, we should сheck the result against the lodestar method “to assure that the precise percentage awarded does not create an unreasonable hourly fee.”
General Motors Corp.,
Using that method, the parties calculated their total fees at $2,085,260.65. In their fee petition, however, counsel provided only a modicum of supporting information. They simply disclosed the total fee for each of the three law firms involved and the total number of hours (8,772) that the firms worked on the case. No further breakdown or description was provided. The rendition of the costs was similarly inаdequate. Since this court must protect the interests of the class members, we requested counsel to furnish us with their contemporaneous time sheets with explanations of work done, the hourly rate for each lawyer working on the cases, and a detailed categorization of their costs. Counsel promptly made supplemental filings. 1
We have now reviewed these submissions and find that the hourly rates, staffing, and the work performed were fair and reasonable under the circumstances. We applaud the three firms for dividing the labor so as to avoid needless duplication. The $5,500,000 award is over 2]é times the lodestar and amounts to a generоus but fair premium in terms of dollars. To have granted counsel the requested $7,040,000 fee would have created an “unreasonable hourly” fee.
General Motors,
We now turn to the issue of costs, a figure calculated by counsel to be $1,033,529. Not surprisingly, the bulk of the costs were related to expert witnesses. While counsel have now presented a comprehensive breakdown of their fees, they have not, despite the court’s request, delineated their costs as fully. Enough documentation has been provided, however, for this court to determine that the professed expenses are slightly excessive. For example, the Milberg, Weiss firm claims to have spent $13,271.36 on hotels, meals, *66 and transportation, even though counsel only had to travel between New York and Philadelphia, the defendants were located in this region, and many of the experts were locally-based. This sum is unreasonable. The Mil-berg, Weiss firm also seeks $2,148.02 in secretarial overtime. We reject this item. The class membеrs should not suffer because counsel elected to have some clerical work completed after normal business hours. Counsel also expended $107,808.26 on photocopying and reproduction. They do not identify how many pages were copied or a per page charge. This sum appears to be unduly inflated. Finally, no detail is provided concerning the hours and rates charged by the experts, the largest cost item. In the absence of further support, the amount of $776,958.07 which is claimed seems high. We consider an award of $900,000 in costs to plaintiffs’ counsel to be fair and reasonable.
Finally, plaintiffs’ counsel request that the court award $1,000 to each of the class representatives, J/H Real Estate, Inc. and Joseph Tulino. This type of special award is often bestowed in securities class action cases to recognize the plaintiff for serving as a private attorney general and for conferring a benefit on the class.
See In re SmithKline,
MEMORANDUM ON RECONSIDERATION
Plaintiffs have filed a motion for reconsideration of this court’s Memorandum decision awarding plaintiffs’ counsel $5,500,000 in legal fees and $900,000 in сosts in connection with a $22,000,000 securities class action settlement.
J/H Real Estate Inc. v. Abramson,
A court may reconsider a prior decision “to correct manifest errors of law or fact or to [evaluate] any newly discovered evidence.”
Harsco Corp. v. Zlotnicki,
I. Costs
In their original petition for an award of attorneys’ fees and reimbursement of expenses, the plaintiffs did not provide sufficient itemization. At the class action settlement hearing held on December 23,1996, the court explained that it would need more detailed documentation before it could determine the propriety of the claimed costs and counsel fees. Close scrutiny is required to “protect the rights of the class members whose counsel, when seeking a fee, stand in a position adverse to their clients.”
J/H Real Estate,
Dissatisfied with the court’s decision, the plaintiffs, now taking their third bite at the apple, have finally substantiated their claim with particularity — substantiation which should have been presented in advance of the December 23 hearing. Clearly this additional information did not suddenly surface between our decision of Dеcember 30, 1996 and the filing of the reconsideration motion on January 15, 1997. As a general rule, “[w]here evidence is not newly discovered, a party may not submit that evidence in support of a motion for reconsideration.”
Harsco,
Several of plaintiffs’ cost items appeared dubious on initial review. Expert fees, calculated at $776,953.07, were far and away the largest expense, yet the hours and rates charged by the particular еxperts remained a mystery. We noted that “in the absence of further support” the amount claimed seemed high.
J/H Real Estate,
We were also troubled by the $13,271.36 which the Milberg, Weiss firm claimed to have spent on hotels, meals, and transportation. Considering that counsel only had to travel between New York and Philadelphia, that most of the defendants lived in this region, and that several of the experts were locally-based, this sum appeared unreasonable. Id. Plaintiffs now offer receipts, vouchers, and tickets substantiating this claim. In reviewing these, it appears that the accommodations, for thе most part, were not extravagant. Taxicabs were the transportation rule, limousines the rare exception. Moreover, as we now know that experts from Houston, Texas spent some 1,890.25 hours working on this case, the significant transportation and lodging costs are more palatable. In all, it seems that Milberg, Weiss reasonably limited its hotel, meal, and transportation costs, and that $13,271.36 accurately reflects the total.
Milberg, Weiss also incurred $2,148.02 in secretarial overtime. We declined to compensate plaintiffs for that expenditure, noting that “[t]he class members should not suffer because counsel elected to have sоme clerical work completed after normal business hours.” Id. Nothing in the plaintiffs’ motion for reconsideration convinces us that our determination was in error. Secretarial overtime will be excluded from any cost recovery.
Finally, plaintiffs’ attorneys spent a seemingly inflated $107,808.26 on photocopying and reprоduction. Unaware of the number of pages copied or a per copy cost, the court could not give credence to that figure. Id. Plaintiffs now account for that sum, providing invoices and receipts which describe the number of pages copied, the price per page copied, and tоtal reproduction amounts. Plaintiffs also have informed the court that, upon recalculation, their complete photocopying and reproduction cost is $110,198.12, not the $107,808.26 previously represented. Upon review of the materials submitted, we are satisfied that $110,198.12 is the proper aggregate.
II. Fees
Plaintiffs also seek reconsideration of the award of $5,500,000 in attorneys’ fees, a figure representing 25% of the settlement. As noted above, they request $7,040,000 or 32% of the fund. They primarily rely upon a recent opinion in this District where the court awarded approximately 30% of the settlement fund to plaintiffs’ counsel in an antitrust case.
In re Residential Doors Antitrust Litig.,
ORDER
AND NOW, this 24th day of January, 1997, for the reasons set forth in the accompanying Memorandum, it is hereby ORDERED that plaintiffs’ motion for reconsideration of the court’s Memorandum decision *68 regarding fees and expenses is GRANTED in part and DENIED in part as follows:
(1) This Court’s Order of December 30, 1996 is VACATED to the extent it awarded costs in the amount of $900,000. Plaintiffs’ counsel are hereby jointly awarded costs in the amount of $1,029,111.22 out of the Settlement Fund, plus accumulated interest on that sum, to be divided as they may agree; and
(2) The plaintiffs’ motion for reconsideration is otherwise DENIED.
Notes
. It should be noted that the court held an early status conference in both cases and consolidated them for purposes of pretrial proceedings. A discovery deadline was set The parties were limited in the number of dеpositions they could take without further order of court. The cases were placed in this court’s November, 1996 trial pool. The parties adhered to this schedule and moved the cases expeditiously.
. The requested cost amount is $2,269.76 less than that sought in the original petition. Plaintiffs explain that the difference reflects clerical error.