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Tussey v. ABB Inc.

United States District Court, W.D. Missouri, Central Division

August 16, 2019

RONALD TUSSEY, et al., Plaintiffs,
ABB, INC., et al., Defendants.



         Class Counsel for plaintiffs seek an award of attorneys' fees in the amount of $18, 331, 500, the reimbursement of reasonable expenses incurred in prosecuting this action in the amount of $2, 256, 805, and compensation to each of the class representatives in the amount of $25, 000 from the common fund created from the Settlement in this matter (“Motion”). Doc. 863. The Court has reviewed Class Counsel's request and supporting evidence, prior orders and attorney fee applications made in this case, as well as attorneys' fees and class representative awards from similar cases. For the reasons stated herein, the Court will grant the Motion.

         I. BACKGROUND

         On December 29, 2006, Plaintiffs filed this case against ABB, Inc. and certain plan fiduciaries (collectively “ABB”) on behalf of the Personal Retirement Investment and Savings Management Plan and the Personal Retirement Investment and Savings Management Plan for Represented Employees of ABB, Inc. (collectively the “Plans”). Two Court-ordered mediations were held before trial without a settlement.

         After a month-long trial was conducted, the Court issued its Order and Judgment for Plaintiffs finding that ABB breached its fiduciary duties of prudence and loyalty to the Plans by: (1) failing to monitor and ensure the reasonableness of the Plans' recordkeeping fees ($13.4 million in losses) and (2) removing the Vanguard Wellington fund and replacing it with the Fidelity Freedom funds ($21.8 million in losses). See Doc. 623. Under the ERISA fee-shifting provision, the Court also entered an award of attorneys' fees to Class Counsel, finding that:

[t]he case . . . involved significant novel legal questions regarding the extent of the fiduciary duties owed by plan administrators under ERISA and will have a general deterrent effect on similarly situated fiduciaries … In addition, the results of this case may help benefit other plan beneficiaries, in the event of similar litigation, by further clarifying the duty of loyalty and prudence owed by record keepers and employers.

Doc. 718, p. 3. At that time, the attorneys' fee award was $12, 947, 747.68, approximately one-third of the monetary award. See generally id. Injunctive relief was also granted, which was estimated to have a value at that time of at least as much as the monetary relief originally ordered by the Court. Doc. 782, n.5.[1]

         ABB appealed this Court's trial order and decision to the Eighth Circuit Court of Appeals. The Eighth Circuit upheld the district court's finding that ABB breached its fiduciary duty to monitor Plan recordkeeping fees and its finding of damages on that claim. The Court of Appeals, however, reversed this Court's ruling on the removal and replacement of the Vanguard Wellington fund. See Tussey v. ABB, Inc., 746 F.3d 327, 338 (8th Cir. 2014).[2]

         On remand, this Court again found that ABB breached its fiduciary duty on the Wellington claim but ruled for ABB on the issue of damages. Doc. 771. After a second appeal, the case was remanded for calculation of damages on Plaintiffs' Vanguard Wellington claim. See Tussey v. ABB, Inc., 850 F.3d 951 (8th Cir. 2017).

         While the issue of damages on the Wellington Vanguard claim was being litigated, the parties engaged in a third, and ultimately successful, mediation. The Court preliminarily approved the parties' settlement agreement on April 2, 2019. Doc. 861. Notices were sent on June 14, 2019 to all members of the potential class, which included information pertaining to the Class Counsel's requested fee of approximately one-third from the Settlement fund, the requested reimbursement of expenses, and the incentive awards to the class representatives.

         II. ANALYSIS

         A. In a common fund settlement, a percentage of the recovery for an award of attorneys' fees is appropriate.

         Under the “common fund” doctrine, Class Counsel is entitled to an award of reasonable attorneys' fees from the settlement proceeds. Fed.R.Civ.P. 23(h); Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). “Courts utilize two main approaches to analyzing a request for attorney fees”-the “lodestar” approach or the “percentage of the benefit” approach. Johnston v. Comerica Mortg. Corp., 83 F.3d 241, 244 (8th Cir. 1996). While “[i]t is within the discretion of the district court to choose which method to apply, ” in common fund cases, the percentage of the benefit approach is generally recommended. Id. at 245-46; see also Koenig v. U.S. Bank N.A., 291 F.3d 1035, 1038 (8th Cir. 2002). In such cases, the benefit should be based on both the monetary and the non-monetary value of the settlement. Beesley v. Int'l Paper Co., No. 06-703, 2014 WL 375432, at *1 (S.D. Ill. Jan. 31, 2014) (citing Manual for Complex Litigation (Fourth) § 21.71 (2004)); Principles of the Law of Aggregate Litigation, A.L.I., § 3.13(b) (May 20, 2009) (“a percent-of-the-fund approach should be the method utilized in most common-fund cases, with the percentage being based on both the monetary and the nonmonetary value of the settlement.”); cf. Blanchard v. Bergeron, 489 U.S. 87, 95 (1989) (cautioning against an “undesirable emphasis” on monetary “damages” that might “shortchange efforts to seek effective injunctive or declaratory relief”).

         Although the “Eighth Circuit has not laid out factors that a district court must consider when determining whether a percentage of the common fund is reasonable…[d]ecisions from this Court have relied on factors set forth by other Circuits, including the Third and Fifth Circuits.” Yarrington v. Solvay Pharms., Inc., 697 F.Supp.2d 1057, 1061-62 (D. Minn. 2010) (citing Carlson v. C.H. Robinson Worldwide, Inc., No. 02-3780, 2006 U.S. Dist. LEXIS 67108, at *7 (D. Minn. Sept. 18, 2006)). In Yarrington, this Court considered seven factors: (1) the benefit conferred on the class; (2) the risk to which plaintiffs' counsel was exposed; (3) the difficulty and novelty of the legal and factual issues of the case; (4) the skill of the lawyers, both plaintiffs' and defendants'; (5) the time and labor involved; (6) the ...

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