The nearly $100 million legal fee cap in a landmark class action in Washington is less than half of the amount the plaintiffs' attorneys could have received through a contingency fee arrangement, the attorneys for lead class member Elouise Cobell said in court papers.
The plaintiffs' lawyers representing a class of Native Americansagreed in the settlement to a range of fees between $50 million and $99.9 million—money that will be cut from the roughly $1.5 billion in compensation for potentially hundreds of thousands of beneficiaries. The suit, filed in 1996, challenged the government’s mismanagement of billions of dollars of trust fund assets stemming from private use of Indian land.
The fee cap is a far cry from what the plaintiffs’ attorneys call “fair compensation” for a complex civil case that has dragged on in Washington’s federal trial court with no end in sight. The attorneys, including Washington solo practitioner Dennis Gingold and Kilpatrick Stockton partner Keith Harper, argue that more than $223 million is appropriate for legal fees. Click here for a copy of the plaintiffs’ fee notice.
The $223 million noted in court papers filed Dec. 10 isn’t a random number. It represents the compensation from the contingency fee arrangement the plaintiffs’ attorneys executed before the settlement was announced in December 2009. The attorneys expected a 14.75% cut of any funds created for the benefit of class members. The plaintiffs "believed then, and continue to believe" the contingency fee agreement is consistent with controlling law.
Government lawyers involved in the case “insisted” at the end of settlement negotiations, according to Cobell’s attorneys, that class counsel not be paid more than $99.9 million for fees and expenses through the end of December 2009.
The settlement’s legal fee structure, the plaintiffs’ attorneys said, is “at odds with the executed fee agreements and controlling law.” The lawyers for Cobell said controlling law holds that the percentage-of-recovery method is the governing standard.
The plaintiffs' motion appears intended to get the judge to agree to the fee award the plaintiffs negotiated with the government. Cobell’s lawyers said they intend to ask for $99.9 million in fees, but note that the presiding judge has the final say on any award and can provide class counsel more—or less—than what the settlement itself sets out.
Justice Department lawyers and the plaintiffs’ counsel agreed that neither side will appeal an award of attorney fees if the final amount falls between $50 million and $99.9 million.
The plaintiffs’ attorneys and Justice Department team also agreed that Cobell’s lawyers can seek up to $12 million in fees for work on the case after December 2009. Congress last month gave final approval to the Cobell agreement.
Gingold (above) and Harper said in the court papers that Cobell, the lead plaintiff, should receive an incentive award of $2 million and that three other named plaintiffs should receive between $150,000 and $200,000 as a bonus for their role in a case that “subjected them to considerable hardships.”
The attorneys for Cobell also note that the named plaintiffs will seek reimbursement for expenses and costs—in the range of $10.5 million. That money is exclusive of the incentive award.
The plaintiffs’ notice of the incentive award and legal fees was filed simultaneously with a joint motion for preliminary approval of the settlement. Senior Judge Thomas Hogan of the U.S. District Court for the District of Columbia has scheduled a hearing for Dec. 21.
The 42-page joint motion [.pdf], signed by Justice Department attorney Robert Kirschman Jr., Gingold and Harper, called the settlement the product of “difficult, arms-length negotiations.” The attorneys for the opposing sides said the deal is in the best interest of the class and the federal government.
“Class counsel have undertaken fifteen years of highly contentious and difficult litigation against defendants, including an extraordinary twelve month legislative approval process,” the plaintiffs’ lawyers said in the filing. “In framing and prosecuting this case, they undertook substantial risk, litigated novel procedural, jurisdictional and substantive legal issues, and navigated through a series of unique appellate [decisions].”