Thank You For Submiting Feedback!
United States Court of Appeals for the Seventh Circuit
October 30, 1997, Argued ; April 24, 1998, Decided
Nos. 97-1584, 97-1666, 97-1667
[*1008] CUDAHY, Circuit Judge. Members of a pension fund needed a named plaintiff and legal representation to combat fund mismanagement. Archie Cook, the named plaintiff, needed an incentive to bring the suit, and the attorneys he ultimately retained needed a reasonable fee for their services. One might have thought that members of the pension fund and Cook's attorneys would be satisfied with the result in the district court. The pension fund recovered over $ 14 million and underwent substantial structural reforms, Cook received a $ 25,000 incentive award, and the attorneys obtained more than $ 2 million for approximately 5,900 hours of work. But apparently no one feels that he, she, or it received the benefit of the bargain, since the pension fund challenges the propriety of the incentive award and both the fund and Cook's attorneys object to the amount of attorney's fees. On appeal we affirm the district judge in all respects.
In [**2] 1992, Archie Cook, a truck driver and participant in the Teamsters Local 705 Health and Welfare Fund, filed a class action [*1009] against the Fund, the International Brotherhood of Teamsters Local 705, and the trustees of both entities. He alleged that the Fund had been mismanaged in violation of the Employee Retirement Income Security Act of 1974 (ERISA), and sought damages for the Fund of more than $ 20 million and structural reforms. In September 1995, Cook's attorneys advised the district judge of the possibility of settlement with the defendants' liability insurer. At Cook's request and in an effort to facilitate settlement, Judge Manning referred the case to Special Master Frank McGarr. The parties entered into a settlement agreement in January 1996, which provided that the Fund would undergo extensive structural reforms and receive a cash payment of over $ 13 million. Judge Manning preliminarily approved the settlement and again referred the case to Special Master McGarr, instructing him, in relevant part, to make recommended findings regarding petitions for attorney's fees and incentive awards.
In accordance with these instructions, Special Master McGarr held hearings, reviewed documents [**3] and then prepared a report for the district judge. In his report, the master concluded that Archie Cook was entitled to a $ 25,000 incentive award because of the time he devoted to the case and the risk he faced in bringing the suit. With respect to attorney's fees, Cook's counsel had requested $ 4,785,000. In evaluating this request, the special master found that contingent fee agreements in the Chicago area typically provide that attorneys will be paid between 25 and 30 percent of the amount they recover for their client. The master determined that, in light of the substantial relief obtained by Cook's counsel and the riskiness of the litigation, an appropriate fee was $ 4,400,000, or 30 percent of the amount recovered for the Fund. 1 Although the number of hours logged by Cook's attorneys and their hourly rates were not directly relevant to the percentage-of-fund analysis, the special master noted the reasonable hourly rates for the attorneys and paralegals involved in the litigation: between $ 115 and $ 325 for the attorneys and $ 80 for paralegals. Attorneys had logged 4,741 hours and paralegals 1,166 hours, for a total of 5,907 hours. The master acknowledged that a "very small [**4] part" of the total hours expended may be excessive, but did not pursue the issue further. The attorney's fees and Cook's incentive award were to be paid out of the settlement escrow created for the benefit of the Fund.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
142 F.3d 1004 *; 1998 U.S. App. LEXIS 7863 **
ARCHIE COOK, individually and on behalf of a class of persons similarly situated, Plaintiff-Appellant, Cross-Appellee, and CHARLES PRESSMAN, CHARLES PRESSMAN, P.C., ROBIN B. POTTER, POTTER & SCHAFFNER, P.C., JOEL M. HELLMAN, STEPHEN G. SELIGER, STEPHEN G. SELIGER, LTD., Petitioners-Appellants, Cross-Appellees, v. RALPH NIEDERT, JOHN MONROE, JOHN NAVIGATO, et al., Defendants-Appellees, and GERALD ZERO, JOHN MCCORMICK, ROBERT PRESAK, individually and as Trustees of Local 705 International Brotherhood of Teamsters Health and Welfare Fund, et al., Defendants-Appellees, Cross-Appellants. TEAMSTERS LOCAL UNION 705, TRUCK DRIVERS, OIL DRIVERS, FILING STATION AND PLATFORM WORKER'S UNION, et al., Plaintiffs, Cross-Appellants, v. DANIEL C. ("DANNY") LIGUROTIS; WILLIAM D. DELESSANDRO, et al., Defendants.
Prior History: [**1] Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 92-C-7042 and 95-C-828. Blanche M. Manning, Judge.
attorney's fees, special master, lodestar, district court, multiplier, district judge, recommendation, percentage-of-fund, common fund case, incentive award, settlement, deference, reasonable fee, appellate court, cases, abuse of discretion, lodestar method, hourly rate, paralegal, common fund, fee-shifting, riskiness, logged, merits, fee application, fee award, compensate, contingent, principles, expended
Civil Procedure, Appeals, Standards of Review, Clearly Erroneous Review, Judicial Officers, Masters, General Overview, De Novo Review, Compensation of Masters, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees, References, Abuse of Discretion, Appointment of Masters, Governments, Fiduciaries, Labor & Employment Law, Employment Relationships, Fiduciary Responsibilities, Legal Ethics, Client Relations, Attorney Fees, Excessive Fees, Employment Contracts, Conditions & Terms, Judges, Basis of Recovery, American Rule, Pensions & Benefits Law, Damages, Statutory Awards, Remedies, Equitable Relief, Costs, Class Actions, Class Members, Named Members