In re FIDELITY/MICRON SECS. LITIG. v. FIDELITY MAGELLAN FUND

In re FIDELITY/MICRON SECS. LITIG. v. FIDELITY MAGELLAN FUND

Opinion

 [*736]  SELYA, Circuit Judge. In certain types of complex litigation, the lawyers' monetary interests often comprise a tail that wags the dog. So it is here: this dispute over the reimbursement of certain payments fronted by the lawyers is what remains of a consolidated class action (actually, an amalgam of some 16 suits) asserting claims of securities fraud. After the district court approved a global $ 10,000,000 settlement, the plaintiffs' attorneys filed a petition seeking 30% of the common fund in fees and approximately $ 277,000 in out-of-pocket expenses. The district court awarded the movants 17 1/2 % of the fund ($ 1,750,000)  [**2]  as counsel fees, but turned down their request for expenses. See In re Fidelity/Micron Sec. Litig., 1998 U.S. Dist. LEXIS 21698, No. 95-12676- RGS, 1998 WL 313735 (D. Mass. June 5, 1998).

In refusing reimbursement, the district court alluded to the movants' failure to provide adequate documentation to support the expense request, but it based its ruling principally on its own Standing Order Regarding Costs. The Standing Order, reprinted in the appendix hereto, states in substance that, absent exceptional circumstances, the court as a matter of practice will eschew reimbursement of certain categories of expenses. To the chagrin of the lawyers who appear as appellants here, the categories enumerated in the Standing Order (e.g., postage, facsimile transmission costs, copying expenses, telephone charges, cost of computer-assisted legal research) enveloped much of what they sought to collect. The one major exception related to the cost of retaining an expert witness. After the appellants moved for reconsideration of the expense reimbursement request and produced the expert's billing records, the district court promptly granted them the $ 124,000 they had spent on that front. The court remained resolute, however,  [**3]  as to the balance of the expenditures. This appeal followed. In it, the lawyers protest only the court's refusal to allow broader expense reimbursement.

We begin with bedrock: ] in situations in which expenses are potentially reimbursable, district courts enjoy wide latitude in shaping the contours of such awards. See In re Thirteen Appeals -- San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295, 309 (1st Cir. 1995). Such awards are permissible in "common fund" cases -- but the district court, called upon to make awards of fees and/or expenses in such a case, functions as a quasi-fiduciary to safeguard the corpus of the fund for the benefit of the plaintiff class. See, e.g.,  [*737]  Cook v. Niedert, 142 F.3d 1004, 1011 (7th Cir. 1998). Consequently, a reviewing court has the right, if not the obligation, to view skeptically efforts by attorneys to charge substantial expenses to that account.

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